Athletic scholarships are rare. Here’s how to build a stronger game plan to pay for college.

It’s no secret that the cost of higher education has soared in the last few decades, rising at a far greater pace than inflation. But the latest numbers still warrant a double-take: A year of tuition and costs at a four-year private college hit an average of $59,000¹ last year, which adds up to nearly a quarter-million dollars for a degree.

Given these steep costs, it’s no surprise that many parents are looking for alternative ways to fund their child’s education—athletic scholarships among them.

In New York Life’s latest Wealth Watch survey², we asked more than a thousand parents of young athletes how confident they are that their child will earn an athletic scholarship. The results were striking: 50% of parents of young athletes said they were either “very confident” or “moderately confident” that their child would get a scholarship to play sports at the collegiate level.

For some families, the dream may become a reality, but the odds are low: According to the NCAA, just 2% of high school athletes wind up getting an athletic scholarship.³

Athletic scholarships: A changing landscape, but still a rare prize

There’s still plenty of money to go around: About $2.7 billion in athletic scholarship money was awarded to student athletes in 2023, the most recent year on record. And new scholarship rules—the result of a settlement between the NCAA and the federal government—are expected to expand the number of athletic scholarships given to athletes, though likely with a trade-off of fewer “full ride” scholarships.

Still, athletic scholarships remain a rare commodity, and full ride scholarships rarer still, with only 2% of all college athletes playing on a full ride under the current rules.

Jessica Ruggles, corporate vice president of financial wellness at New York Life, played Division 1 tennis—as a walk-on. And she wasn’t alone. “My teammates had varying skill levels and scholarships,” she recalls. “And even those on full rides weren’t aiming to go pro.”

The bottom line: While athletic scholarships are a great goal, they shouldn’t be the only avenue you pursue. A solid backup plan can help ensure you’re prepared for the cost of college—whatever path your child takes.

The backup plan

Generally speaking, there are three primary ways to fund higher education:

• Saving and investing, preferably through a tax-advantaged savings vehicle
• Gift aid, which consists of all aid that doesn’t need to be paid back—financial aid, scholarships, and grants
• Student loans

Let’s explore each option in detail.
 

Saving for college

With the cost of a college degree now rivaling that of a small home, it’s important to treat college planning like any other big saving goal. That means starting early; choosing investments that balance risk, return, and timeline; and taking advantage of every tax-advantaged savings vehicle available.

Many of the parents we surveyed hadn’t taken those steps yet. While 46% said they planned to apply for athletic scholarships, just 36% said they were planning to open a college savings account.

Michael Grinnon, a managing partner at New York Life and former college basketball player, isn’t surprised that the parents of young athletes are falling behind on their college savings. “Busy parents are on the go, running from soccer games to work to driving kids to their next practice,” he says. “The days are long and the years are short, and they lose track of time. What we say is, ‘progress not perfection’—it’s never too late to get started, but the earlier they can start an account and fund them, the better.”

So, what sort of account should you be using?

Of the parents who said they were saving or planning to open a college savings account, most (66%) indicated that they were just using savings or other deposit accounts; while these keep your money safe, that’s where the advantages end. Over the long term, they yield significantly less interest than even a conservative investment portfolio, and that interest is fully taxable.

By contrast, a 529 plan offers tax-deferred growth and tax-free withdrawals, so long as it’s spent on qualified education expenses. Another option is a Coverdell Education Savings Account, which has income and contribution limits but a bit more flexibility in investment options and qualified education expenses.

“An account that can only be used for education expenses might not appeal to parents who think their child will get a scholarship or decide to not attend college,” says Ruggles. “But there is a bit of flexibility: As part of the SECURE Act 2.0, you may be able to roll over up to $35,000 from a 529 to the 529 beneficiary’s Roth IRA without incurring penalties or taxes.”⁴

If that’s not enough flexibility, you might consider less specialized accounts that offer tax advantages without requiring you to spend the money on education. For instance, a Roth IRA allows for tax- and penalty-free early withdrawals to pay for education expenses so long as the account has been open for at least five years. Another option is whole life insurance, which has a cash-value component that grows tax-deferred and can be accessed tax-free.⁵

Grinnon says the versatility of these accounts appeals to many parents who aren’t sure if they’ll need a proper college fund. “We want to give clients flexibility,” he says. “If their children get a scholarship, some of those savings can be used for other things.”

It’s a good idea to work with a financial professional who can help you choose the best account for your needs and use the funds in a tax-optimal way.
 

Gift aid

Gift aid refers to any aid that doesn’t need to be paid back.

This includes:

• Scholarships. These include both athletic and academic scholarships awarded by the college, as well as scholarships awarded by private or nonprofit organizations. If you plan to pursue the latter, know that many of them are structured as a competition that requires students to write an essay and demonstrate academic excellence.
• Grants. These are typically given by governments.
• Financial aid. To qualify, families will need to fill out the Free Application for Federal Student Aid (FAFSA).

If your child is a standout in the classroom as well as on the field, an academic scholarship could very well come into play. “You worry if you don’t do the travel teams and the off-season programs, you’re going to get left behind when it comes to athletic scholarships,” says Ruggles. “And while I didn’t get an athletic scholarship, I wound up earning an academic one.”

Seeking out gift aid can feel like a full-time job, but being resourceful and proactive can make a big difference. Understand the criteria used by the FAFSA to determine need, and work with a financial professional to understand how your family may qualify. Make sure your child keeps their grades up, and seek out grants offered by your state government and scholarships offered by private or nonprofit organizations. Oftentimes, high school guidance counselors can provide a list of local scholarships that juniors and seniors may wish to consider.

Student loans

It’s true that student debt is a growing concern, and no parent wants their child to start their career buried in bills. But the reality is that more than half of college graduates carry some student debt, and federal student loans often come with more manageable terms than other types of borrowing. For example, new graduates typically have a six-month grace period before repayment begins. And if they have subsidized student loans (given to students with financial need), their loans don’t even begin accruing interest until that time.

Still, it’s important for families to fully understand what they’re taking on. When federal student loans are awarded as part of a financial aid package, students should take the time to understand the terms of the loan, including the interest they’ll pay over the life of the loan, the expected minimum payments, and how they’ll fit those payments into their budget as they enter the workforce.

They should also make sure those loans pay off in the form of a degree.

“Student loan debt without a degree is one of the biggest risks associated with attending college,” says Ruggles, who notes that only about 60% of students at four-year institutions graduate. “If your child isn’t sure whether college is for them, starting at a community college can be a smart, strategic move—it lowers costs, offers transferable credits, and gives students time to find the right major before fully committing.”

Once your child graduates, they should be aware of their options for managing their student loans, including federal repayment plans and student loan repayment support offered by some employers.

The bottom line

With the cost of college so high, it’s unlikely that any one source—whether savings, scholarships, or financial aid—will cover it all. That’s why it’s smart to take a well-rounded approach: start with tax-advantaged savings, pursue all available financial aid, apply for grants and scholarships, and use student loans to help fill any gaps.

And yes, athletic scholarships could come into play as well. Many of the parents we surveyed were making moves to improve their children’s chances of getting recruited and receiving scholarships: Half were getting advice from coaches and guidance counselors, and almost a quarter (24%) were sending game tape, highlights, and stats to college coaches. That sort of parental support can go a long way.

Just make sure you’re pursuing multiple funding paths, so you’re prepared no matter how the scholarship journey unfolds.

¹The College Board, 2024
²Methodology: This survey was conducted between March 1 – 6, 2025 among a sample of 1036 parents with children aged 7 – 18 who participate in youth sports. The interviews were conducted online. Results from the full survey have a margin of error of plus or minus 3 percentage points.
³NCAA, 2024
⁴my529.org; certain conditions and limitations may apply.
⁵Accessing cash value will reduce the death benefit and available cash surrender value.