HIGHLIGHTS:

  • The U.S. Department of Education's Office for Civil Rights (OCR) clarifies that scholarships up to the cost of attendance "count as athletic financial assistance and are subject to the same rules under Title IX as other athletic scholarships."
  • In consideration of the OCR's recent clarification, institutions should proactively monitor the athletic financial assistance awards across the athletic program and by gender.

Scholarships up to the cost of attendance "count as athletic financial assistance and are subject to the same rules under Title IX as other athletic scholarships," according to the U.S. Department of Education's Office for Civil Rights (OCR). The NCAA reported this clarification by OCR in a recent memorandum from Chief Legal Officer Donald Remy to all Division I presidents, conference commissioners, athletic directors, senior woman administrators and faculty-athletics representatives. OCR's clarification comes in response to a letter from the National Women's Law Center and the Women's Sports Foundation regarding a "concern that 'some schools' decisions regarding cost of attendance funds will not treat male and female athletes equally[,] as required by Title IX.'"

This situation is not new. The NCAA adopted legislation in January 2015 that allowed the Power Five conferences the autonomy to provide scholarships up to the cost of attendance. Other institutions outside of the Power Five quickly followed suit. We wrote in October, in reference to the Ninth Circuit's decision in O'Bannon v. NCAA, that the decision to require the NCAA to allow institutions to provide scholarships up the cost of attendance most clearly implicates Title IX because of the potential for an imbalance between funding for men's and women's sports teams:

What does this mean in practice? An athletic program could now decide that it will provide the NCAA maximum 85 scholarships to its football team and the NCAA maximum 13 scholarships to its men's basketball team. Moreover, it could decide to provide the maximum 15 scholarships to its women's basketball team. It could then decide to increase the value of these scholarships up to the cost of attendance for these 113 scholarships, and let's imagine that cost of attendance for each student-athlete is $50,000. This means that the institution is providing $5,650,000 in scholarships to just those three teams, but the bulk of that money ($4,900,000) is going to men's teams, which – viewed in a vacuum – would certainly put the institution out of compliance with Title IX with regard to athletic financial assistance. (See Holland & Knight's alert, "Title Implications of the O'Bannon Decision," Oct. 27, 2015.)

The only thing that has changed is that advocacy groups are concerned enough about the Title IX implications of this change that they sought OCR guidance. OCR determined that it was necessary to clarify the issue, and then the NCAA determined it was necessary to put impacted schools on notice.

Action Steps for Institutions

What should institutions do in response? First and foremost, institutions should confirm exactly how much athletic financial assistance is flowing to student athletes, male and female, and ensure that the collected figures include any cost of attendance increases.

Second, the institution should determine how the total athletic financial assistance provided by gender compares to the unduplicated count of the student athletes broken down by gender. Title IX requires athletic financial assistance to be awarded in substantial proportion to the gender breakdown of the athletic program. A disparity of more than 1 percent indicates to federal regulators "a strong presumption" that the institution "is in violation of the substantially proportionate' requirement." (OCR's Dear Colleague Letter: Bowling Green University, July 23, 1998). That means that if the unduplicated athletic count is 50 percent male and 50 percent female, male athletes should not receive 55 percent of the total athletic financial assistance, because the difference of 5 percent is well above the 1 percent ceiling that OCR has set.

Finally, the institution should conduct this analysis for at least three to five years forward. While an athletic program might be statistically out of compliance this year and maybe even next, it can proactively plan to reach compliance with regard to future spending in a reasonable time period. Unless monitored and aggressively budgeted, this is a compliance problem that rarely cures itself.