lois and scholarship agreements

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SoCalHoops Recruiting News

National Letters Of Intent & Scholarship
Agreements: Some Essentials--(Aug. 4, 2000)

There are several essential things that most students and parents need to know about when it comes to recruiting. Things like registering with the NCAA Clearinghouse. . . like when and where to take the SAT and/or ACT. . . like what the necessary combined core GPA/SAT score is in order to be eligible to play NCAA basketball as a freshman. . . and, things like the differences between a National Letter of Intent and a Scholarship Agreement, what the terms of an LOI are and what their legal and practical ramifications are. . .

Over the next few days, we'll be posting up some much requested and essential information for current rising seniors and juniors, things that they'll need to be familiar with as the recruiting process intensifies for them over the next year or two.. . . things they'll need to know, and things they'll want to learn more about in order to take a more active and controlled role in their own recruitment.

Letters of Intent and Scholarship Agreements: What Are They?

We've previously discussed LOI's and Scholarship Agreements in the context of writing about the meaning of "verbal commitments" and "offers" of ascholarship by coaches. And since the summer evaluation period has ended, and the coaches will be making calls and writing letters in earnest over the next month or so before the fall NCAA evaluation period starts again in September, this is a good time to memorialize again some of the conversations which have taken place on our SoCalHoops Men's Message Forum about Letters of Intent, Scholarship Agreements, and the like, i.e., things you'll need to know about recruiting when it comes time to make a decision about what to do when a coach makes an offer.

Let's just recap a bit some of the discussion that's taken place before jumping into a detailed outline of what the LOI and Scholarship Agreement are about. . . Verbal "offers" and athlete "commitments" (i.e., acceptance of an offer) do not form a legally binding contract, as such conduct might in the real world, for several reasons, not the least of which is that most athletes are minors and thus do not have the legal capacity to enter into contracts. As a real, technical matter, not until a recruited player signs either (a) a National Letter of Intent or (b) a "Scholarship Agreement" is anyone bound to do anything (i.e, either the school bound to offer a one-year scholarship, or the student bound to enroll).

So what is an LOI?

LOI's--Letters of Intent: An LOI is a letter which binds a player to the school, and he is obligated to play for the SCHOOL (not the coach--thus if the coach leaves, the player is still stuck at the school, and must sit out a year unless the signing school will release him).

LOI's are the preferred method by schools of securing scholarship athletes, and most universities (except the Ivy's and a smattering of other D-I's) use the NLI (National Letter of Intent) system. Once a player signs an LOI, he cannot be recruited by any other schools and he is obligated to attend the school he signs with. If he doesn't enroll, he can't enroll anywhere else without first sitting out a year. If he enrolls at another school which recruited him, he has to sit out another year as well under NCAA regs (and this is in addition to the one year NCAA penalty for transfer).

In other words, a player who signs an LOI had better be sure he wants to attend that school because that's where he's going to attend unless the school decides to let him out of his LOI by granting a release, something which is rarely done.

When can a player sign an LOI?

A player can only sign an LOI during specific periods. This fall it's only from November 8 through 15, after the fall open evaluation period. Any letter signed before the 8th and after the 15th is void. The LOI can actually be received by the school up to 20 days later, but can only be signed during the signing period.

Is the LOI binding on the school?

Well initially the answer is "No" and the school can renege even on a signed LOI, at least until the player enrolls at the school. Once the player enrolls, the school is then bound to offer the athletic scholarship for the one year period. It's important to understand a little history about the NLI program. The National Letter of Intent Program is administered by the Collegiate Commissioners Association (CCA). Started in 1964 with seven conferences and eight independent institutions, the program now has 48 leagues with over 500 participating institutions (more than just Division I schools).

After some conferences experimented with a plan generally known as the "Letter of Intent" to help curtail aggressive recruiting following WW II, the idea of a National Letter of Intent was presented to the 1961 NCAA Convention. Poorly received, the proposal was defeated twice. Following the second rejection, the commissioners and faculty representatives from each of the major conferences met to discuss a voluntary, cooperative program.

The accepted plan, which became the National Letter of Intent program, called for a prospective student-athlete to sign, along with a parent or legal guardian and the athletic director, an "Inter-Conference Letter of Intent" on a specific date. This letter served as certification that the student intended to enroll at a certain institution in the fall. The athletic director indicated the type and extent of financial aid the institution was willing to provide. Other cooperating conferences and institutions would then respect his/her decision and not attempt to recruit him/her further. This agreement was subject to the prospective student qualifying for admission to the institution of his/her choice and the NCAA requirement for financial aid.

Over the years, some of the terms of the National Letter of Intent agreement have changed, but the basic premise has remained the same: Once a student signs the letter, he is obligated to enroll at the signing university, cannot enroll elsewhere without suffering a penalty and upon signing, he cannot be recruited by any other schools who also participate in the program. The school agrees that IF the student enrolls and is qualified, he will get a one-year athletic scholarship (Remember, all athletic scholarships, or more properly "grants in aid" can only be from year to year under NCAA regulations. . . there is no such thing as a "guaranteed" four year scholarship).

The student's commitment to attend the school with which he signs is only for one year. If the student attends and receives the financial aid, and then later transfers, he doesn't incur any other penalty besides the NCAA penalty of sitting out one year of residency at the new school to which the athlete transfers.

On the other hand, if a student signs an LOI, and for some reason changes his mind (either because he decides to attend another school, or because the coach left, or for some other reason), under the terms of the National Letter of Intent, the student must sit out one year (in addition to any other NCAA transfer penalites) before becoming eligible to play.

The actual terms of the National Letter of Intent can be found at the "National Letter of Intent" website (where you can also find much more information about the program and how it works, and the actual text of the LOI iteself). And remember, a link to the NLI website can always be found at our "Recruiting" links. . . look at the top of that page for "NCAA Information for Athletes" and click that link, or simply scroll down through the links to the section containing the link for the NLI website.

Scholarship Agreements: What are They?

Before the NLI program developed, schools would have athletes sign "scholarship agreements." There is no standard language, and the terms of these agreements vary from institution to institution, but the general concept is not all that much different than the LOI with the major exception that (a) a scholarship agreement usually is deemed to be a contractual commitment by the school to extend a scholarship if the student enrolls, but (b) the student is not contractually obligating himself to actually enroll, is free to continue being recruited by other schools if he/she desires, and there is no penalty on eligibility if the student later decides to not enroll at the signing school and attends somewhere else.

As you can imagine, most universities and colleges who subscribe to the NLI system don't encourage the use of scholarship agreements, and they have generally fallen out of favor with the schools, for obvious reasons from their perspective. The NLI system affords the school just about absolute certainty that a player they are recruiting won't be recruited by a competing school after the signing (which was why the program was instituted in the first place), whereas the Scholarship Agreement doesn't do that.

When can a scholarship agreement be signed?

Unlike the National Letter of Intent program, which has limited and very specific signing days (in the fall, an LOI can only be signed between 12:00 a.m. November 8 through midnight November 15, and in the spring, the LOI can only be signed between April 11 and May 15), a scholarship agreement can be signed at any time.

Despite the differences, both documents are really the functional equivalent of one another, again with the major difference being that there is no penalty imposed on an athlete if he later changes his mind in the case of signing a scholarship agreement, and the fact that the SA can be signed at any time, not just during specific periods.

Having laid out the differences between the two documents, which one should a prospective recruit ultimately sign if he/she is offered a scholarship?

Well, that all depends upon whether an athlete can convince a school to offer him an SA rather than an LOI. Obviously, the SA favors the student and continues to allow him/her some freedom of choice and the right to change his mind without penalty, whereas the LOI does not. It's largely a question of negotiating, and leverage.

Take two examples which highlight what can happen:

Example 1: Jason Kapono of Artesia was being recruited heavily. He didn't sign an LOI during the late or early signing periods, and was frequently quoted (at least his coaches and parents were) as being concerned about signing at a school where the coach might later be terminated or leave for one or another reason. With an LOI, Jason would have been stuck, since the LOI binds the player to the school, not the coach. As most people know by now, Jason ultimately signed a "Scholarship Agreement" with UCLA, which contractually committed the university to extend him a one-year athletic scholarship if he enrolled (the same as an LOI would have done) but it gave Jason the continued freedom to change his mind about attending without suffering any penalty if, for example, Lavin was no longer the coach. Of course, he wound up enrolling, and the rest is history. But the lesson is important: Jason trusted the school and more to the point, the school trusted him not to change his mind, even though signing an SA really didn't "end" his recruiting and other schools could have, if they desired to do so, continued to recruit him.

Example 2: Spencer Gloger. . . Spencer was highly recruited by the Ivy League out of high school. Spencer gave a verbal commitment to attend Princeton early on. But the Ivy League is one of the major conferences at the D-I level which does NOT subscribe to the National Letter of Intent program. The Ivy League doesn't offer athletic scholarships, and it's students don't sign LOI's. Which means that all the school can do is wait for the student to enroll after he/she makes a "commitment". After giving his verbal to Princeton, Spencer continued to be recruited by UCLA, (which greatly upset the Princeton coaches), then reneged on his commitment to Princeton and announced that he would attend UCLA. Because the Ivy's don't subscribe to nor participate in the NLI, the coaches there felt that UCLA had interfered, but there was nothing really to be done about it. But Spencer, smart Ivy League guy that he turned out to be, opted not to sign an LOI with UCLA, and instead signed a scholarship agreement with the Bruins (a fact which was publicized on UCLA's own official website at the time).

Spencer then proceeded to participate in the Say No League with some of his future UCLA teammates, but for reasons known only to him and his family (but widely believed to have involved issues over how much or how little playing time Spencer might get as a freshman, especially with the time that Kapono was anticipated at the time to receive as a freshman), Gloger backed out, changed his mind, and enrolled at Princeton, where, as they say, the rest is history, and Gloger went on to be named Ivy League Player of the Week, was one of the leading scorers, averaging 12.1 ppg for the season and 32 minutes a game as a freshman.

But the point is that if Spencer had signed an LOI with UCLA, he would not have been able to change his mind, wouldn't have been able to play at Princeton without sitting out a year, and who, really would have benefitted from that? At UCLA, the writing was on the wall, and Spencer would likely have been unhappy, and the Bruins (who could have used his shooting as things later turned out with the ineligibility problems which later cropped up) would also have likely been unhappy with Spencer too, at least initially. . . So with an LOI, you would have had a player who was "stuck" and likely rarely used in games, and thus unhappy, but unable to transfer without suffering a one-year penalty, whereas with the Scholarship Agreement, everything worked out for all involved. . . Spencer got to play and attend the college of his choice (ultimately), and everyone walked away from the "experiment" with UCLA a little wiser, but ultimately a lot happier.

The moral of the story though, quite simply is that there are a few essentials that every player and every parent ought to be familiar with when it comes to recruiting, and the National Letter of Intent is one thing that most players will face one day sooner or later, and it makes sense to familiarize yourselves with the details of the LOI, what its implications are, and when to sign it and when not to.