WASHINGTON — President Donald Trump signed an executive order Friday aimed at reining in what the administration described as an out-of-control financial arms race in college sports, directing federal agencies to use contracting and grant authority to enforce athletic governing body rules on eligibility, transfers and name, image and likeness payments.
The order, set to take effect Aug. 1, 2026, directs agency heads that contract with or provide grants to universities to evaluate whether violations of NCAA or other governing body rules on eligibility, transfers, revenue sharing and improper financial activities are serious enough to affect a school’s eligibility for federal contracts and grants.
The order defines improper financial activities to include fraudulent NIL schemes, the use of federal funds for NIL or revenue-sharing payments, and tortious interference with scholarship agreements between student-athletes and other institutions. It defines a fraudulent NIL scheme as any arrangement paying above fair market value for goods or services in connection with a student-athlete’s participation in college athletics, including through booster collectives.
Trump called on Congress to pass comprehensive legislation but said further delay was not an option.
“The 500,000 annual educational, athletic, and leadership-development opportunities that provide almost $4 billion in scholarships” are at stake, the order states.
The order also directs the Attorney General to take legal action against state laws that conflict with governing body rules by burdening interstate commerce or impairing contracts, a move aimed at state NIL laws that have given some schools competitive recruiting advantages.
Among the reforms the order encourages the NCAA or other governing bodies to adopt before Aug. 1 are a five-year eligibility window with limited exceptions, a one-time transfer with immediate eligibility and a second transfer after earning a degree, medical care for athletics-related injuries during and after enrollment, and a national student-athlete agent registry.
The order cites mounting university debt as a driving concern, noting one major athletic program closed fiscal year 2025 with $535 million in athletics-related debt and another carried $437 million.
The order explicitly states it is not intended to curtail women’s or Olympic sports and directs that any revenue-sharing framework must prevent reductions in scholarships or opportunities in those programs.
