On June 6th, 2025, a federal judge approved a groundbreaking settlement that will fundamentally reshape how college athletics operates. The House v. NCAA case, originally filed in 2020, represents the most significant change to college sports in decades, ending longstanding restrictions that prevented student athletes from receiving compensation for the billions of dollars generated by their performances. The settlement approval was initially delayed because several student athletes objected to the roster limit provision as it could reduce playing opportunities. The parties modified the settlement terms to ensure that no current student athlete would lose their opportunity to play in college athletics as a result of the new roster limits.
The NCAA is no stranger to litigation, and this antitrust lawsuit consolidated three separate cases against the NCAA: House v. NCAA, Hubbard v. NCAA, and Carter v. NCAA. The student athletes argued for the right to profit from their name, image, and likeness (NIL) rights used by the NCAA to promote athletic competitions and drive revenue for the NCAA, conferences and schools.
The 2021 Supreme Court decision paved the way for the current settlement, making clear that college athletics should be treated like the lucrative entertainment industry it has become. That decision also established that the NCAA cannot restrict education-related benefits to student athletes.
Key Settlement Terms
The settlement creates a new framework for college athletics built on four major pillars:
Retroactive Compensation: All Division I athletes who competed between 2016 and 2024 will receive back damages from a settlement fund. This could affect as many as 390,000 former student athletes. The NCAA will contribute 60% of these payments, while individual schools will cover the remaining 40%, distributed. The payments will be distributed over ten years, with the schools’ portion coming from money typically allocated for NCAA competitions.
Revenue Sharing Cap: Division I schools can now directly pay athletes up to $20.5 million annually for NIL rights. This is a dramatic change from previous policies in which schools were prohibited from directly compensating athletes beyond scholarships and basic expenses.
Roster Restructuring: The traditional system of sport-by-sport scholarship limits will be replaced with roster size limits. Under the old system, different sports had different caps on full scholarships, leading coaches to either award full rides to select athletes or divide scholarships among more players. The new structure allows schools to provide full scholarships to every athlete on their roster, though roster sizes will now be capped.
NIL Oversight: Any NIL deal exceeding $600 must now be approved by a third-party clearinghouse. This oversight focuses particularly on deals between athletes and entities closely tied to their schools, aiming to prevent disguised pay-for-play arrangements.
Implications for Current and Future Student Athletes
For student athletes, these changes create unprecedented opportunities alongside new responsibilities. Schools can now directly compensate athletes for their NIL rights, but the athletes must maintain full-time enrollment and meet Division I academic progress requirements throughout their eligibility period.
The settlement also introduces increased scrutiny and reporting requirements for NIL agreements, particularly those involving NIL collectives. Athletes and their representatives should expect more rigorous fair market value assessments of proposed deals, ensuring that compensation arrangements serve legitimate business purposes.
Future of College Athletics
This settlement represents more than just a legal victory; it acknowledges the economic reality of modern college athletics. By allowing schools to directly share revenue with the athletes who generate it, the NCAA is finally aligning its rules with the multi-billion-dollar industry that college sports have become.
The House v. NCAA settlement closes a significant chapter in the long struggle for student athlete rights while opening up an entirely new era in college athletics. Student athletes, families, and institutions navigating this new landscape should seek experienced legal counsel to understand their rights and obligations under these transformed rules.
Contributions to this blog by Caroline Miller.