The published guidance was one of the last acts of the Biden administration.

On January 16, 2025, the U.S. Department of Education’s Office for Civil Rights released guidance regarding the obligations of institutions of higher education to comply with Title IX regulations in conducting name, image and likeness (NIL) activities. The guidance is a potentially significant development for institutions of higher education with student-athletes and may cause a greater number of institutions to decline adopting the revenue-sharing model, as outlined in the pending House v. NCAA settlement.

The published guidance was one of the last acts of the Biden administration. On January 20, 2025, President Trump issued an executive order imposing a “regulatory freeze pending review” that directs federal agencies to freeze all new rules and guidance for 60 days from the date of the order. Given the difference of interpretation of Title IX, the Department upon review may freeze and subsequently repeal or significantly amend this guidance. An act of Congress or federal court ruling could also supersede this departmental guidance. Unless and until that occurs, we recommend that institutions familiarize themselves with the guidance as it is currently in effect and violations of Title IX carry serious consequences.

Overview of Title IX and New Guidance

The Title IX civil rights law was originally enacted as part of the Education Amendments of 1972, 20 U.S.C. §1681 et seq., and provided the Department with enforcement authority to prohibit discrimination on the basis of sex in any education program or activity that receives federal financial assistance. As required by the statute, the Department promulgated regulations under 34 C.F.R. § 106 to provide guidance for compliance with Title IX enforcement. In particular, 34 C.F.R. § 106.1(c) pertains to “athletic scholarships or grants-in-aid” and provides:

To the extent that a recipient awards athletic scholarships or grants-in-aid, it must provide reasonable opportunities for such awards for members of each sex in proportion to the number of students of each sex participating in interscholastic or intercollegiate athletics. 34 C.F.R. § 106.1(c).

A major controversy of the recent House settlement is whether institutional revenue-sharing and NIL payments to athletes constitute “athletic scholarships or grants-in-aid,” which in turn will subject those payments to Title IX protections and require even distribution of funds. See 34 C.F.R. § 106.1(c). The recent guidance has clarified this issue, as now all compensation provided to a student-athlete for NIL constitutes athletic financial assistance under Title IX. The Office for Civil Rights will now “include the amount of all compensation and other financial assistance provided by a school to its student-athletes when calculating the total amount of athletic financial assistance.” It is likely that this guidance would apply to revenue sharing and to school-sponsored NIL compensation. This guidance will likely have significant repercussions for institutions of higher education, particularly those participating in Division I athletics, as the House settlement has led to institutions to consider adopting a revenue-sharing model, which would be impacted by this guidance.

In contrast to the compensation paid or arranged directly by the institution, the guidance also refers to compensation provided by a third-party (i.e., a collective), and provides that such a payment itself does not trigger Title IX protections. However, the guidance here reaches beyond the walls of the institutions and provides that schools must ensure that funds provided by a private source (a collective) do not result in their student-athletes being treated in a discriminatory manner. It is noted that third-party NIL payments to student-athletes may “create similar disparities and therefore trigger a school’s Title IX obligations.”

Additionally, keep in mind that this guidance is simply a “fact sheet” distributed by the Department of Education, which offers suggestions and recommendations, as the Department admits in the guidance that it “does not have the force and effect of law” and is “not meant to be binding.” This guidance lacks the effect of law, which a regulation would have, and which requires several protective measures of agency rulemaking, including the opportunity for public notice and comment. Nonetheless, the guidance still serves as a suggestion to the courts should any litigation arise.

Potential Impact in College Sports

The House settlement’s language left many unanswered questions as to Title IX’s applicability. The majority of universities and colleges have been operating under the assumption that revenue-sharing and NIL compensation would not be subject to Title IX. For example, the athletic director of a major university recently outlined how the athletic department planned to divide the $20.5 million in annual revenue-sharing amongst the various sports, with more than 91 percent going to football and men’s basketball players. The remaining 9 percent would have been split amongst the remaining men’s and women’s sports team. Since the House settlement was preliminarily approved, such a contemplated division of revenue-sharing funds has been common across the major athletic programs.

As noted herein, the Title IX guidance sheet not only provides that revenue-sharing funds must comply with the same gender-equity standards as scholarships, but the guidance suggests that third-party NIL deals (NIL deals between a student athlete and a third party unaffiliated with the university or college) must also meet those standards. While universities may have an easier ability to control the division of internal revenue-sharing amongst the sports, universities will need to develop a plan to attempt to control the dispersion of third-party NIL deals to the extent possible. Given the complexity of the institution/third-party distinction, it is recommended that institutions consult with counsel in order to ensure compliance with Title IX.

Noncompliance with Title IX

Institutions must comply with Title IX (and its interpretation in the new guidance) in order to avoid disciplinary sanctions. The Office for Civil Rights strictly enforces Title IX compliance and is tasked with investigating and resolving complaints. Penalties for noncompliance contain supportive and remedial measures, including but not limited to:

• Supportive nondisciplinary, nonpunitive individualized services (including counseling, extensions of course deadlines, modifications to class schedules, campus escort services, changes in work or housing locations, leaves of absence, increased campus security);
• Loss of federal funding;
• Civil lawsuits;
• Reputational damage;
• Administrative sanctions;
• Mandatory training requirements;
• Increased oversight requirements; and
• Financial penalties.

What This Means for Institutions

As stated above, institutions should consult with counsel as part of their planning processes for how to proceed under the pending House settlement. Institutions should comply with the new guidance and continue to monitor updates from the Department, as the situation may change in the near future.

For More Information

If you have any questions about this Alert, please contact Katherine D. Brodie, Andrew John (AJ) Rudowitz, Bryan Shapiro, any of the attorneys in our our Sports Law Group, Matthew Steinway, any of the attorneys in our Higher Education Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.