By Panayiotis Constantinou, The Sports Financial Literacy Academy, Nicosia, Cyprus
NIL (Name Image Likeness) has provided student-athletes with a level of financial freedom that did not exist a few years ago.
The money feels exciting, fast, and empowering. But NIL has also introduced a new reality: earning without understanding creates long-term risk. Many athletes are learning this only after tax bills arrive, deals go wrong or compliance questions surface.
NIL financial education is not a luxury in the NIL era: It is a necessary form of protection.
Earning Without a Plan Leads to Overspending
When money comes in quickly, it can disappear just as quickly. Many student-athletes spend before they understand how taxes, savings and budgeting work. This is not because they are irresponsible. It is because no one ever taught them how money flows.
Opendorse (the leading athlete marketplace and NIL technology company) has found that a large portion of NIL earnings come in small amounts spread across content deals, appearances and digital promotions. Without financial planning, these unpredictable payments encourage short-term thinking. Athletes spend what they receive, not realising how much is owed later or how inconsistent NIL income can be over a season.
A financial plan makes income feel stable. Without one, even strong NIL earnings feel chaotic.
Tax Mistakes Can Follow Athletes Long After College
NIL income is self-employment income. This means that taxes are not automatically withheld. The IRS (the Internal Revenue Service) has issued multiple reminders to student-athletes that NIL earnings, free gear, and even some travel reimbursements may be taxable.
Student-athletes, who do not set aside money throughout the year, often face unexpected tax bills. Some even fall behind on payments, creating penalties that follow them beyond college. A lack of financial education turns what should be an opportunity into a burden.
Understanding taxes is not optional anymore: it is part of successful earning.
Contract Confusion Can Create Long-Term Obligations
A surprising number of student-athletes sign NIL contracts without fully understanding them. Some agreements include automatic renewals or long-term rights to use an athlete’s name, likeness and image. Others require deliverables that stretch into future seasons.
Compliance departments have reported rising cases of athletes unintentionally breaking contracts because they did not understand deadlines or exclusivity. Without education, athletes sign away more than they realise.
A deal should support student-athletes’ future: not restrict it.
Lack of Financial Literacy Hurts Stability After Sport
Most college athletes will not earn significant money playing professionally. For many of them, NIL is the highest-earning window of their athletic lives. Without financial education, they may spend or mishandle money that could have created long-term security.
Financial literacy helps athletes:
• build savings;
• understand investment basics;
• avoid debt; and
• prepare for life after sport.
NIL is not just income: it is training for financial adulthood.
Conclusions
NIL income can be life-changing, but only if student-athletes understand how to manage it.
Without financial literacy, NIL becomes unpredictable and risky. With it, student-athletes gain control, confidence and a foundation for their long-term stability.
Education is the real competitive edge in the NIL era. The money matters, but the knowledge is what lasts.
For further information, log onto the Sports Financial Literacy Academy website at ‘www.moneysmartathlete.com’