Federal Bill Guarantees College Athletes NIL Rights, Blocks Schools from Restricting Pay, and Mandates FTC Oversight

The College Athlete Economic Freedom Act is a major federal move that directly addresses the Name, Image, and Likeness (NIL) landscape. Simply put, this bill establishes a national rule: colleges and athletic associations cannot stop current or prospective student-athletes from making money off their own NIL. It also explicitly states that any compensation an athlete receives for NIL activities will not count against their athletic scholarship or grant-in-aid, ensuring that making a deal doesn't cost them their financial aid (SEC. 3).

The Money and the Scholarship: Keeping Them Separate

For anyone worried that a big NIL deal might jeopardize a student's ability to afford tuition, this bill provides a clear answer. The law ensures that income earned from using an athlete’s name, image, or likeness cannot negatively affect the amount or renewal of their scholarship (SEC. 3). This is crucial for students from lower-income backgrounds, guaranteeing that their pursuit of economic opportunity won't undercut their academic funding. Furthermore, if a school offers any support related to NIL deals—like educational workshops or compliance assistance—that support must be available to all athletes in that program, regardless of gender, race, or sport, making sure no one gets special treatment or is left behind (SEC. 3).

Shining a Light on the NIL Collectives

One of the biggest changes involves the institutional NIL collectives—those third-party groups that raise money to fund athlete deals at specific schools. Under this Act, these collectives must register with the Federal Trade Commission (FTC) and submit detailed annual reports. These reports must break down the number of NIL deals and the total dollar amount paid out, categorized by gender, race, and sport (SEC. 3). This mandatory transparency is huge. It gives the public and researchers the data needed to see exactly where the money is flowing and if there are disparities, especially regarding Title IX compliance, which the bill now explicitly includes when evaluating a school's support for NIL activities (SEC. 3).

Opening the Door for International Athletes

For international student athletes—often left in a confusing legal gray area regarding their visa status and ability to earn money—this bill creates a dedicated pathway. It establishes a new F visa category specifically for student athletes and automatically grants them work authorization for all NIL activities (SEC. 5). This means an international player, like a star soccer player from Brazil, can sign an endorsement deal without violating their student visa. Even if a court or agency later determines that college athletes are employees, this section protects the international athlete’s visa status and ensures they can be paid just like domestic athletes (SEC. 5).

Strong Federal Enforcement and the Right to Sue

This legislation isn't just a suggestion; it comes with teeth. If a school or association violates the athlete’s NIL rights, the FTC can step in, treating the violation as an unfair or deceptive business practice (SEC. 6). This is a big deal because the FTC’s enforcement authority is expanded to cover non-profit entities like athletic associations and collectives, overriding some existing limitations. Even more importantly, the bill grants individuals the right to sue in federal court if they are harmed by a violation, allowing them to recover actual damages and attorney fees. The bill also declares that any violation of these new rules is automatically considered a violation of the Sherman Antitrust Act (SEC. 6), signaling that the federal government is taking anti-competitive behavior against athletes very seriously.

Federal Rules Take Precedence

Finally, the bill largely preempts state laws that try to restrict an athlete’s ability to enter into NIL contracts (SEC. 7). This creates a uniform national standard, which simplifies things for athletes, agents, and companies operating across state lines. The only exception is that states can still regulate the certification and licensing of athlete agents, keeping some local control over who represents the players.