As the college football season kicks off, many young athletes taking the field across the country are receiving substantial income from name, image and likeness (NIL) deals and revenue-sharing arrangements, creating new financial challenges as they learn to manage those funds.

NIL first took hold in college sports in 2021, after the NCAA adopted an interim policy permitting athletes to profit from their name, image and likeness following years of pressure that included the Supreme Court's ruling in NCAA v. Alston. Compensation for student athletes has recently evolved again: under the House v. NCAA settlement, schools in the top tier of Division I can now share a portion of their revenue directly with athletes, a shift that began taking effect in 2025. Some players may earn six- or even seven-figure incomes through such deals — particularly at schools in the power four (P4) conferences, comprising the Big Ten, SEC, ACC and Big 12, or among players competing in college football and basketball.

Gordon Whittaker, a wealth management advisor and managing director at Merrill Lynch, told FOX Business that regardless of whether student athletes go on to play professionally after their college careers end, the new income gives them an early opportunity to build financial habits and a foundation that can serve as a springboard for their futures.

"The earlier you can establish financial habits… the more likely that it is to be effective and the more likely it is to stick. And so extending that period of time and giving the opportunity for these young men and women to earn money earlier in their careers, earlier in their lives, expands that opportunity to start to really build those financial habits," he said.

"The majority of the conversations that we're having with these young people is about being a good steward of those funds and building those positive financial habits," Whittaker said.

While college athletes are in school, he said, "their budget ought to be very small in terms of what they need to spend. Whether they're a star player on a P4 football team or they're a backup on a second- or third-tier school, they don't have a lot of ongoing expenses, so anything they receive ought to be at an incremental savings rate."

"We just encourage them to live like college students and retain those assets, start to own assets and allow that force of compound interest to take effect over the next several decades," Whittaker said. "Even small dollar amounts turn into massive dollar amounts if given enough time."

Preparing for life after sports

One area where Whittaker said advisors are trying to instill awareness in college athletes is the importance of understanding that if they are fortunate enough to play their sport professionally, they need to save money to account for supporting themselves after their playing career eventually ends. That advice carries particular weight given how short professional playing careers typically are relative to a normal working life, which is why the stakes of early saving are higher for athletes than for most young earners.

"We spend a lot of time talking about this idea of being an owner versus being an employee and what wealth really looks like," he added. "What we really approach is to shift that mindset away from equaling wealth, towards owning assets equaling wealth."

"You're not going to work until you're 65, or at least not in this capacity, and so every dollar that you make – 10 cents of that may be today, 90 cents of that is to make up that gap when you stop in your primary profession," Whittaker said.

"Having those conversations and really imploring the importance of delaying gratification has been very important," he added, noting that it is helpful for athletes to look at professional athletes who are being good stewards of their funds with an ownership mentality.

Tax planning awareness improves

Earning income from NIL and revenue sharing also means players owe taxes, which Whittaker noted was a stumbling block in the earlier days of NIL, as some athletes did not understand that 1099 income is not subject to withholding the way W-2 income is. He said many collegiate programs have since begun helping athletes split their income to account for their tax bill.

"That has been popularized enough now where we don't come across people who have no idea that they have to do some tax planning when they receive the funds very often anymore, which is definitely a good thing," Whittaker explained.

A new calculus for turning pro

The shifts in student athlete compensation also present a new question for athletes capable of playing professionally, as they must weigh what they would earn in pro sports against the opportunity to stay in college and continue earning while they still have eligibility.

Whittaker said the question used to be "are you going to improve your draft status enough by sticking around for it to warrant delaying income for a year?" Now, current income flows are factored into that decision.

Brand responsibility

Student athletes hoping to bolster their earning potential through NIL or revenue sharing while in college must also be mindful of how they present themselves and build their brand. The stakes of that brand management are higher than in the past, since NIL deals depend directly on an athlete's public standing, and missteps off the field can affect compensation in ways that never applied to previous generations of unpaid college athletes.

"This may be a message to those that are looking to NIL and looking to play a sport in college, the most important thing to keep in mind is you are your own brand, particularly as it relates to NIL. And the decisions you make off the field directly impact how you're compensated," Whittaker said.

"There's a significant amount of responsibility that comes with notoriety and being purposeful and understanding that your actions, every minute of every day, impact your monetization," he added.