One major issue underlying the pending House v. NCAA settlement is its impact on international students on F-1 student visas (academic student). As analyzed in a previous episode of Highway to NIL, if approved, the House settlement will allow Division I schools to directly compensate their student-athletes for their name, image, and likeness (NIL) as part of a revenue-sharing system. However, international students may jeopardize their status within the U.S. if they accept this money.

Non-immigrant Visas and Legal Residency

Most international students have legal residency in the U.S. on F-1 visas, or student visas, which is governed by the U.S. Citizenship and Immigration Services (USCIS).[1] These visas are only available to students who are enrolled full-time at a college or university. Generally, F-1 visa students are not allowed to have off-campus employment unless the work is directly related to their degree and/or career development. Receiving income from unauthorized sources constitutes a violation of the conditions of the F-1 visa and could either force a change in their visa status or force the student to leave the country within 30 days or else face deportation or a reentry ban.[2]

Workarounds to F-1 Visa Restrictions and NIL Payments Pre-House Settlement

However, schools have already been using certain workarounds to these F-1 visa restrictions for NIL compensation. For example, international student-athletes may earn money from NIL deals if the compensation is structured as passive income[3] (as opposed to active income[4]), like a group licensing agreement to sell apparel or other products.

Another example of a workaround to the F-1 visa restriction is for international student-athletes to perform all NIL services outside of the U.S. For example, an NIL deal could be structured so that the student-athlete perform the NIL deal in his/her home country (during holiday or summer break) or overseas while traveling with their athletic program (such as during a basketball tournament in The Bahamas).

Implications for International Students Post-House Settlement

The House settlement, if approved and implemented, introduces the new issue for international students of accepting money directly from their school. In doing so, the student-athlete may violate the USCIS’s strict employment restrictions because the payments may constitute active income (i.e., income earned from working). Because the House payments are being paid to student-athletes directly from the school, ostensibly for their performance in that sport, it is possible (if not likely) that USCIS will consider these student-athletes to be de facto employees who earn what amounts to a salary (i.e., active income) by working for the school in the form of playing their respective sport.

There is no consensus on how to handle the upcoming House payments to international student-athletes. Some immigration attorneys believe that regardless of how a school tries to frame a House payment, any direct payment from a school to a student-athlete will be considered active income by the USCIS.[5] Others argue that these types of payments are analogous to licensing or jersey sales which should be considered permissible passive income.[6] But without guidance from the Department of Homeland Security (DHS), the USCIS, or Congress, international student-athletes and their schools have to do their own risk analyses.

Given this ambiguity, we strongly advise schools and athletic departments to consult with their immigration offices and outside legal counsel before making any direct payments to student-athletes on F-1 visas.

Troutman Pepper Locke will continue monitoring developments as they arise.

[1] https://www.ice.gov/sevis/employment.

[2] https://www.internationalstudent.com/study_usa/way-of-life/working-in-the-usa/.

[3] Passive income is income generated from assets that produce income like stocks that pay dividends, interest from fixed income investments, rental income from investment properties, or other investments that generate proceeds.

[4] Active income is income generated from a salary and hourly wages earned by working.

[5] https://frontofficesports.com/newsletter/an-international-athlete-crisis/.

[6] https://frontofficesports.com/newsletter/an-international-athlete-crisis/.

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Photo of Callan G. Stein Callan G. Stein

Cal’s broad litigation and investigation practice encompasses white collar criminal matters, corporate and commercial civil litigation, internal investigations, and health care litigation. Cal frequently represents and advises higher education clients, particularly in areas related to collegiate athletics and Name, Image, and Likeness (NIL)

…

Cal’s broad litigation and investigation practice encompasses white collar criminal matters, corporate and commercial civil litigation, internal investigations, and health care litigation. Cal frequently represents and advises higher education clients, particularly in areas related to collegiate athletics and Name, Image, and Likeness (NIL) rights and compliance. Cal provides NIL compliance advice and internal investigation services to major universities, including those that participate in Division I football and basketball, and likewise advises schools on athletics contracts, conference affiliations, conference realignment, and other NCAA-related issues. Cal also represents and advises businesses on NIL contracts, as well as NIL collectives on formation and compliance matters. Cal hosts the firm’s “Highway to NIL” podcast that discusses the legal landscape and developments in the area of NIL law.

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Photo of Christopher M. Brolley Christopher M. Brolley

Chris concentrates his practice on federal and statewide product liability litigation through his representation of pharmaceutical and medical device companies involving mass tort, personal injury, and wrongful death claims across the U.S. He also represents clients at the state and federal level in…

Chris concentrates his practice on federal and statewide product liability litigation through his representation of pharmaceutical and medical device companies involving mass tort, personal injury, and wrongful death claims across the U.S. He also represents clients at the state and federal level in matters ranging from breach of contract and corporate governance to data privacy and security. Chris advises higher educational institutions of all sizes, including colleges and universities, on Name, Image, and Likeness (NIL) compliance issues. He provides comprehensive guidance on permissible and impermissible NIL activities and navigating state NIL laws, NCAA Bylaws, and other NCAA policies. Chris creates and implements tailored strategies for mitigating the potential risk of NCAA and state attorney general enforcement activity. He co-hosts the firm’s Highway to NIL podcast that discusses the legal landscape and developments in the area of NIL law.

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