Texas NIL Law: What Athletes, Schools, and Sponsors Need to Know

Texas is home to more NCAA schools than any other state, and its college sports fanbase is one of the most loyal and engaged in the country. With packed stadiums and top-tier programs, it is no surprise that Texas has become one of the leading states in shaping NIL rules.

Over the past few years, Texas has built one of the strongest NIL frameworks in the country. It gives athletes more freedom while helping schools stay competitive. The most recent updates, including House Bill 126, passed in June 2025, show that the state is still refining the system to support athletes, schools, and future federal standards.

This article explains what NIL is, how it works in Texas today, and what athletes, fans, and brand partners should consider.

NIL stands for Name, Image, and Likeness. In simple terms, it refers to an athlete’s personal brand and the ability to earn money from it. That can include sponsored posts, business partnerships, autograph signings, hosting camps, or selling merchandise.

Before 2021, college athletes were not allowed to legally earn money from their NIL. When NIL first became a reality, states like Texas began creating their own guidelines.

Texas passed its first NIL law in 2021. It allowed college athletes to earn money through their name, image, and likeness, but the rules were strict. Athletes couldn’t promote brands that conflicted with school sponsorships, and they weren’t allowed to endorse products like alcohol, tobacco, or gambling. Schools also couldn’t help set up deals. The intention was to protect the recruiting process, but the result was that Texas programs found it harder to keep up with schools in states that had more flexible policies.

In 2023, Texas made updates through House Bill 2804 and Senate Bill 1385. These changes provided schools with more flexibility to support their athletes by partnering with NIL collectives. Collectives are external groups, often led by alumni or donors, that assist student-athletes in identifying and managing NIL opportunities.

Under the new law, schools can educate athletes, promote collectives, and provide support without being directly involved in the deals themselves.

Then in June 2025, House Bill 126 took things further. Schools in Texas can now directly pay athletes for NIL-related work. This includes appearances, social media campaigns, and other promotional activities. The payments must be tied to actual services and based on fair market value. They cannot be tied to performance or used as recruiting promises.

Each school can now allocate up to approximately $20.5 million per year toward NIL compensation. These payments align with the expected House v NCAA settlement and help Texas schools stay competitive nationally.

Collectives continue to play a big role in Texas. They raise money to support athletes through marketing campaigns, nonprofit appearances, and brand partnerships. These groups remain separate from school payments and cannot offer money based on performance or recruitment.

Under the new law, collectives now work alongside schools rather than in place of them.

NIL Clubs are not collectives. They are run by the athletes themselves. These student-led platforms, accessible via the NIL Club app, allow fans to pay a small subscription fee for exclusive content, behind-the-scenes updates, or personal posts. NIL Clubs help athletes build their brand without relying on a third party.

Because they are student-run and do not involve outside adults or boosters, NIL Clubs follow all NCAA rules and Texas law. Built-in protections ensure compliance. This includes rules regarding school logos, age-appropriate content, and avoiding endorsements of restricted products. NIL Clubs provide a safe and simple way for athletes to earn money while maintaining their eligibility.

Texas athletes now have more earning options than ever. They can work with collectives, build NIL Clubs, sign brand deals, sell merchandise, and now receive direct compensation from schools.

Colleges are stepping up, too. Many now offer financial literacy programs, contract education, and branding workshops. Athletes can build income and manage their future without giving up scholarships or eligibility. The 2025 law gives athletes more financial control and more freedom to grow both on and off the field.

High school athletes in Texas are currently limited in what they can do when it comes to NIL. According to UIL rules, student-athletes are not permitted to sign NIL deals with brands or outside companies while they remain eligible to compete in high school sports.

There are some exceptions. Athletes who are 17 or older and have completed their high school eligibility, such as after graduation, can enter NIL agreements through platforms like NIL Club. Students may also sign college-related NIL deals if they are enrolling at a university, as long as those deals follow NCAA rules and are not tied to recruitment or performance.

Even with these options, certain restrictions still apply. High school athletes cannot promote products like alcohol, tobacco, or gambling. Schools may offer guidance, but they cannot act as agents or take a commission on any deal.

Each college has its own system for managing NIL. Schools like the University of Texas, Texas A&M, Texas Tech, Houston, and UNT require athletes to report their deals, usually through a school-approved compliance platform.

If a deal conflicts with a school sponsor, it may be denied. Athletes also need permission to use school logos or uniforms in their content. Many universities now provide legal support, media training, and financial planning resources. Some are also testing revenue-sharing models that will be launched during the 2025–2026 academic year.

For brands, the Texas NIL law offers clarity. Deals must involve actual services at fair market value. Pay-for-play and recruiting-based payments are not allowed. This structure protects athletes and helps brands build sustainable partnerships.

Schools are hiring compliance teams, offering educational resources, and using tools to help athletes build strong content. Title IX is also a significant factor in the equation. Schools are making sure female athletes have equal access to deals, training, and exposure.

With HB 126 now allowing direct payments to athletes, along with earlier laws that support collectives and open recruiting conversations, the system is evolving fast.

Nonprofit organizations are also stepping in, providing athletes with opportunities to earn money through community-based work. On a national level, lawmakers are working toward a more consistent set of rules across all states. If that happens, Texas is already in a strong position to lead by example.

Equity remains a key focus. More schools are building systems that ensure athletes across all sports and backgrounds have fair access to NIL opportunities.

Texas is leading the way in NIL. Between direct payments, strong collective support, and athlete-run NIL Clubs, student-athletes now have more control and more options than ever.

If you are a college athlete, a high school senior, a fan, or a brand, this is the future of sports in Texas. NIL is here to stay, and Texas is helping define how it works.