Since the NCAA's adoption of its Name, Image, and Likeness (NIL) policy in 2021, college athletics have been transformed into a marketplace worth billions. In the wake of those developments, interested members of Congress have largely focused on the rules governing athlete compensation, recruiting, and competitive balancing.
The recently introduced Helping Undergraduate Students Thrive with Long-Term Earnings (HUSTLE) Act takes a different approach. Rather than weighing how college athletes earn NIL income, the HUSTLE Act asks how they can preserve it.
This forward-looking shift addresses the reality that many college athletes earn meaningful income before they complete their education or begin their long-term careers. As NIL opportunities continue to expand and become a lasting feature of college athletics, lawmakers are increasingly looking at broader issues surrounding college athlete compensation.
What Is the HUSTLE Act's NIL Investment Account?
The HUSTLE Act would amend federal tax law to create tax-advantaged NIL Investment Accounts for eligible college athletes. Athletes would be permitted to contribute a portion of their NIL earnings into an Investment Account (up to the annual gift-tax exclusion amount, which is $19,000 in 2026). The contributed amount is excluded from the college athlete's taxable income and would grow tax-free.
Upon graduation, withdrawals would be taxed as long-term capital gains or could be rolled over to a retirement account. Withdrawals prior to graduation would be taxed as ordinary income along with a 10% penalty (with the penalty being waived for withdrawals used to pay for certain education, medical, and career-transition expenses). The bill also includes a requirement that NIL Investment Account trustees provide financial education materials to the athlete.
Unlike broader NIL proposals that seek to establish a national regulatory framework, the HUSTLE Act focuses on the financial management of earnings that athletes have already received.
Why Does NIL Income Create Unique Financial Challenges for College Athletes?
The HUSTLE Act recognizes that NIL income often arrives during a uniquely compressed period of an athlete's life. Many college athletes are receiving significant taxable income for the first time while balancing academics, athletics, and largely uncertain professional prospects. For many, the largest paydays of their early careers may occur before graduation.
Members of Congress have previously introduced measures to address some of the tax complexities surrounding NIL income. Supporters of the HUSTLE Act say that it is critical to help college athletes preserve a portion of their income in long-term savings.
What Does the HUSTLE Act Mean for College Athletics and the NIL Industry?
While the path to enactment is unclear, the HUSTLE Act signals an evolution in Congress's approach to NIL. Earlier debates centered largely on whether college athletes should be compensated at all, and how that compensation might be regulated. The HUSTLE Act takes as a given that NIL is part of college athletics and instead focuses on how athletes manage those earnings over time.
If that policy direction continues, financial planning may become a more prominent component of the NIL ecosystem, alongside contract negotiation and compliance. Universities, agents, financial advisors, and other stakeholders could increasingly find themselves helping athletes navigate not only ways to maximize NIL opportunities, but also ways to build long-term financial security.
In that respect, the HUSTLE Act may be less notable for creating a specific new investment account than for signaling where the NIL policy conversation is headed.
If you or your company would like to discuss the HUSTLE Act, please contact the authors or visit the Venable Sports Law team's web page and subscribe to Chalk Talk.
The authors thank legislative policy analyst Sean E. Lancey for his assistance in writing this alert.