The One-Year Scholarship Loophole Is College Sports’ Quietest Roster Weapon

OPENING STATEMENT

The college sports spotlight has been  pointed at Baton Rouge this week: a judge considered whether former NFL players can suit up for LSU, while the SEC simultaneously filed a federal lawsuit accusing Lane Kiffin and LSU of a deliberate and coordinated campaign to recruit professional athletes. Away from this commotion, a quieter, more consequential story about roster management is unfolding on campuses across the country. It affects more athletes and has a more profound real world impact to potentially all college athletes. 

Injuries no longer are something for athletes to recover from during their college years; they have become critical tools and a part of important roster management strategies for coaches and programs. And we get more calls about it every day.

College athletes have taken heavy criticism for the transfer portal's free agency culture, even if it wasn’t a construct of theirs. Fans and college leaders decry it, and one of its architects, Tennessee Attorney General Jonathan Skrmetti, has called it a “train wreck that's “sucking the life out of college sports.”

The criticism is hypocritical: schools are running an identical playbook in reverse, and receiving virtually no scrutiny. It’s called the One-Year Scholarship Loophole.

Since the House settlement replaced scholarship caps with hard roster limits last year, schools can now offer aid to every single roster spot. But, nothing forces them to guarantee the scholarship aid beyond year one. For example, enter a legal but ethically murky maneuver: multi-year scholarship agreements that list full funding in year one and $0 or $1 in years two through four. Because the paperwork technically promises multiple years, athletes and families often believe they're protected.

They are not protected. If a scholarship agreement explicitly zeroes out later years, the school has no renewal obligation. And there’s no requirement to offer an appeal hearing, since nothing is technically being “reduced or canceled.” Athletes can stay, but it’s on them. 

That distinction matters because the NCAA's Student-Athlete Core Guarantees explicitly bar schools from failing to renew aid for athletically related reasons, such as injury, illness, performance, or roster-management decisions. The zero-dollar clause is how programs sidestep that guarantee entirely: the athlete isn't “non-renewed,” they simply never had year-two funding in writing to begin with.

Long Island University golfer Clarice Bell is a preview of what's coming. Injured as a freshman with a rare rib condition, she worked through two surgeries and continued attending practice. Then was told via video call that her scholarship, worth over $46,000 annually, was being pulled for “budget cuts,” a rationale her attorney called invalid on its face. Her appeal was reportedly denied before she could present evidence of her attendance and rehab progress, which is precisely the “reduced or fail to renew for athletic reasons” scenario the NCAA's guarantees supposedly prevent.

Athletes get branded as mercenaries for exercising transfer rights the NCAA itself created. Meanwhile, schools have engineered contracts that let them cut ties after one year while claiming, on paper, to offer "multi-year" scholarships, a level of roster fluidity that mirrors professional free agency far more than it does the "student-athlete" framing the NCAA still uses to justify amateurism.

If the NCAA wants credibility in any discussion of adjusting transfer rules or portal windows, it should take the first step. Close the loophole. Ban nominal-value aid agreements, require real multi-year commitments, and preserve appeal rights regardless of how a scholarship letter is drafted. Institutions are supposed to exist to educate and develop young people, not to engineer contract language designed to squeeze, confuse, and outmaneuver the very students they recruited to wear their jersey.

Absent NCAA action, the burden falls on athletes and families to read the fine print before they sign, because right now, nobody else is protecting them from it.

EXHIBIT A

Three stories, one huge warning this week: college sports’ financial model is coming under pressure from every direction. UCLA joined the Big Ten’s media-rights bonanza, yet its athletics department still ran more than $222 million in cumulative deficits since 2020, evidence that bigger conference checks cannot cure weak revenue engines or runaway costs. Syracuse, meanwhile, shows the institutional side of the same problem: enrollment weakness is no longer confined to small colleges. And in Louisiana, NIL officials describe fatigued donors, stretched budgets, and athletes whose compensation expectations exceed market reality. The coming divide may not simply be rich programs versus everyone else. It may be schools with sustainable business models versus those borrowing against a future that never arrives.

EXHIBIT B

In an interesting juxtaposition, the NCAA’s Hail Mary for federal intervention just got longer odds. A new ad starring former Alabama head coach Nick Saban supporting the Protect College Sports Act is scheduled to run during this weekend’s college football games. Yesterday, however, the House of Representatives announced a decision to leave Washington early for the final two weeks of September, removing a critical path to passage before the midterms. A lame-duck vote remains possible after November 3, but with legislative time shrinking, the NCAA’s long-sought antitrust shield still looks like a long shot.

ON THE DOCKET

The apparent Lane Kiffin hedge seems to be a glimpse of the next college-sports arms race: not merely spending more, but financializing winning. A third-party insurer reportedly spent about $662,000 on five Kalshi contracts that could pay up to $3 million if LSU wins the College Football Playoff, mirroring the new LSU coach’s playoff-bonus structure. The obvious next step seems a menu of campus hedges (especially given what we mentioned above): insure a buyout against a losing season, protect NIL budgets against a star’s injury or transfer, offset a revenue hit if March Madness is missed, or even monetize coaching-search risk. But there is a line between sophisticated risk management and normalizing bets on the performances of young athletes. Given that sports wagering is pervasive among 18-to-22-year-olds, will others trade principles for dollar chasing.

FOOTNOTES

46%

Five-year increase in spending on a child’s primary sport in 2024, according to a recent New York Magazine article