With college athletes now navigating a multimillion-dollar economy that rivals professional leagues, a bipartisan duo in the Senate is pushing to rewrite the financial playbook for student sports.
Senators Maria Cantwell (D-WA) and Marsha Blackburn (R-TN) introduced legislation Tuesday dubbed the “HUSTLE Act”—the Helping Undergraduate Students Thrive with Long-Term Earnings Act. The bill proposes a specialized tax shelter for Name, Image, and Likeness (NIL) earnings and establishes strict federal guardrails against predatory sports agents.
The legislation comes as the dollar figures in collegiate sports continue to skyrocket. According to Fox Sports data cited by the Senators, at least 25 college athletes are projected to earn over $2 million in 2025 alone. In November, the NCAA’s College Sports Commission reported clearing over 12,000 deals worth a combined $87.5 million.
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A 401(k) for the Locker Room
The core of the HUSTLE Act is the creation of a “NIL Investment Account.” Similar to a traditional retirement vehicle, this account would allow athletes to stash a portion of their endorsement money tax-free.
The tax benefits are tied to the student’s academic progress. If an athlete withdraws funds before graduating, the money is taxed at ordinary income rates. However, if they wait until after graduation, distributions are taxed at the significantly lower long-term capital gains rate.
“Many of these athletes will be in a unique situation where they will earn NIL income during a relatively brief period of their careers,” said Sen. Cantwell, the ranking member of the Senate Commerce Committee. “Our bill will set up a specific NIL Account where they can set aside some of that income and build long-term savings.”
The bill text outlines several technical provisions for these accounts:
- Retirement Rollovers: Up to $35,000 from an NIL account can be transferred into a Roth IRA or similar retirement arrangement.
- Penalties: Early withdrawals for non-qualified expenses would face a 10% penalty.
- Qualified Expenses: Funds can be used penalty-free for medical costs, education, or career transition expenses.
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Capping the ‘Rogue’ Agents
Beyond taxes, the bill aims to regulate the cottage industry of agents that has sprung up around NIL. The Senators argue that the rapid influx of cash has attracted unscrupulous actors looking to exploit inexperienced teenagers.
“Since athletes have been able to earn NIL, some have been victimized by agents who have charged shockingly high commissions or have tried to take ownership of the athlete’s intellectual property rights,” Cantwell noted.
The HUSTLE Act amends the Sports Agent Responsibility and Trust Act to implement a federal cap on agent fees, limiting them to 5% of the value of an endorsement contract. It also mandates that agents register with the state they operate in and prohibits them from making false promises to entice students to transfer schools—a major point of contention in modern college recruiting.
Crucially, the bill establishes a “private right of action.” This allows student-athletes to sue agents in federal or state court if they violate these transparency laws, banning pre-dispute arbitration agreements that often force these settlements behind closed doors.
“We must empower these students to safeguard their financial future and protect themselves against rogue agents,” said Sen. Blackburn.
The bill requires the NCAA (or relevant athletic associations) to maintain a public, searchable database of registered agents to help families verify representation. If passed, the tax provisions would apply to taxable years beginning after December 31, 2025.
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