The days of schools using the NCAA Student Assistance Fund to pay insurance premiums for star athletes might not last long.
The association issued a waiver opening up a new avenue for college football players to secure loss of value insurance, according to the website 30-Mile Radius, which covers NCAA legislation.
"The academic and membership affairs staff approved a waiver to allow a Division I student-athlete to borrow against his future earnings potential to secure a loan from an established, accredited commercial lending institution, for the purpose of purchasing loss-of-value insurance," the waiver said. "Staff waived the normal application of the amateur status and benefits, gifts and services to permit the student-athlete to secure a loan to pay for the premium for loss-of-value insurance under the same circumstances that a student-athlete is permitted to obtain a loan to pay the premium for disabling-injury insurance."
What does that NCAA-speak mean? Essentially, football players have been allowed to borrow against future NFL earnings in order to secure loans that cover disability insurance. The problem with that is disability insurance only pays out if the player can't play the sport any more. When you hear about players taking out insurance policies, they are often referring to loss of value insurance, which would pay out if an injury causes them to drop from the first round to the third, for example.
The new waiver now allows players to borrow against future earning in order to secure loss of value insurance without it being an NCAA violation.
As 30-Mile Radius notes, most schools prior to the waiver being issued used the NCAA Student Assistance Fund to cover the premiums for their star athletes. This was popularized by Texas A&M as a way to lure top left tackle Cedric Ogbuehi back to school in lieu of declaring early for the draft. This tactic was later used by Oregon for Marcus Mariota and others, as well as Florida State for Jameis Winston's insurance.
While schools can still pick up the tab for their players, it seems far more likely they'll want to reserve their allotment of the Student Assistance Fund for other purposes. Those athletes still are able to get the insurance policy they need, just without the school's help. This could be a boon to underclassmen who are top prospects, as those like UCLA linebacker Myles Jack could get a policy earlier than normal and borrow against potential NFL riches in order to not break the bank.
The NCAA is expected to address this topic through upcoming legislation to make it even easier for players to obtain insurance policies.
You can follow Bryan Fischer on Twitter at @BryanDFischer.
