Michigan head coach Jim Harbaugh is always willing to offer his take on any number of subjects the sport of college football faces. Among the issues that never seems to go away is whether or not players should be compensated as a student-athlete beyond just a scholarship. Speaking at an event on Thursday, Harbaugh touched on the subject and expressed some concerns he has with the concept.
“If you pay players, if you made them employees in college sports, then they’ll have to pay taxes and would the scholarship become a taxable benefit,” Harbaugh openly wondered, according to the Detroit Free Press. “If he’s getting a $65,000 scholarship plus $30,000 or $40,000 a year, is the government going to look and say ‘you owe us 40 percent in taxes’ and are you paying more than you make back into taxes?”
Harbaugh’s point about the government taxing players on any additional compensation on top of the value of a scholarship is not unique, and it has been mentioned before. It is a valid concern that sometimes gets overlooked. Paying a player could qualify them to be legally viewed as employees of a university, which opens up their income to be taxable assets.
“I worry about making them employees. But maybe there’s a way to do some kind of deferred compensation,” Harbaugh continued. “I think that (could be) a possibility and we’re exploring that right now.”
This is another idea that has been floated around before as well. Creating a fund that can be paid to a player upon completion of their college career to account for various compensation could be a possible solution to the “pay the players” model, although that would still have many details to sort out before becoming a realistic possibility.