In a few recent threads discussing the college v. Pro paths, several posters have mentioned the MLB scholarship program. I thought it may be productive to drill down a little and flesh out the nuances of the program. (I am not an expert, but have done some research - which is about 8 years old.)
First, for HS draftees and college kids with less than four years of schooling, the draft contract will have a scholarship component. For HS kids, money for college will be available at some time in the future which can be used to pay undergraduate college expenses. Likewise, for college kids who have less than four years of school.
Generally, baseball does not have large numbers of college grads in its ranks. I have been told that less than 20% of the amount MLB sets aside for the scholarship fund is ever used - so by their own historical actions, players do not finish school in time on MLB nickel. This should demonstrate that even with a portion of costs covered (see below), players find it daunting to finish their degrees.
When Can The Money Be Accessed
Overall, there are time limits by which the MLB money can be tapped. As I understand it, the money MUST begin to be used no later than five years from leaving baseball. (It can be used earlier.) Once the money flow begins, there is a limited period of time the tap can remain open (maybe four years - but I am not sure). There are various red tape issues which accompany the money - including timing of reimbursements, etc..
How much and What does the player get
The player can receive up to the amount set forth in the contract. So, if your kid is expecting to attend a private school after retiring with a current price tag of 50k, make sure the private school amount is set forth in the contract (If not, State U costs will be the default).
The MLB money is used for tuition fees and books and also contains a room and board component. BUT the room and board is pegged to the colleges cheapest options (e.g., the three to single room dorm rather then the single roommate dorm).
AND the amount received is fully taxable.
AND not indexed for inflation.
As a quick and dirty example, take a kid on 50% COA at Vandy (65k COA). Vandy scholarship is tax free 32.5k. Parents need to pony up remaining 32.5k. Over the next three years, parents pay roughly 100k. Kid is drafted and MLB picks up the last year somewhere in the future (note, if the kid doesn't have three full years of credits, MLB will only pay for a single year worth of credits,leaving kid/school/parents to cover any shortfall.)
Take the same kid who signs a pro contract out of HS and retires at 25. Vandy's COA has risen 20% over the seven years and is now 75k. Kid gets 65k (the original amount), taxes drop that to 40k ish. So, kid is 35k short and needs to make that up - and that assumes the kid is single and willing to live in the cheapest dorm; if the kid has picked up a wife and young family along the way, it's more difficult.
For some, say good bye to that academic college
For many kids, admissions standards were lowered when compared to the average non-athlete admit. I know the local D1 baseball power's regular admits are 1200 (old two part SAT), baseball players magic number is 1000. So, a kid who was admitted to this school with a 1100, would not have been admitted as a non-athlete. This hidden mine can be huge!
Take that hypothetical kid from Vandy. If he heads off to the pros directly from HS, does he lose his spot at Vandy; in other words, how can he gain admission to Vandy when he retires?
We faced this problem.
S was recruited to a high academic D1 with scores and grades which matched the average of all admitted students. This is a type of school where your diploma gets you a head start in the real world. BUT, without baseball there is no way he would have been admitted to any school which paid attention to great essays (his was not very good), community service, depth of passion in areas other than baseball, club presidencies, etc. - in short, he offered little to this school other than baseball. In discussing the draft with scouts during home visits, we focused on the MLB program and ONLY after the draft did we explore the question "after he retires, where will he go to college?"
After the draft we called the college - which routinely defers admissions for up to two years for its admits - and were informed it would hold his spot in the class for two years and no longer! Quite a monkey wrench thrown into the works. Without going into details, it would have been very difficult (not impossible, but with no certainty of a favorable outcome) to have been able to matriculate. We decided the school was more important and he passed on signing.
(I read the story of the former pro player signed out of HS who is attending Penn. Great read and great story; but, the kid is an outlier. First, my son's college accepts no transfer students - and this kid began at another college and transferred to Penn. Second, as was pointed out in the article, ten years after HS, scores and grades aren't relevant to the school and luck, persistence, and a unique kid carried the day. So, if your kid passes Stanford, Vandy, or any Ivy to go pro out of HS, recognize that the choice will not foreclose COLLEGE, it will just foreclose THAT COLLEGE.)
Do your homework - no one else will do it for you
The MLB scholarship program is a great PR success. Where else can such a small amount of money actually used (less than 20%) lend the impression that Pro players are merely deferring college rather than foregoing college (the opposite is true).
We found the scouts to NOT be great resources. Most didn't understand the grey areas and nuances (e.g., how long to get reimbursed, how much would be covered, etc.) and in general focused on other aspects of the decision.
(Posters who have actually gone through the process - or whose kids didn't take advantage of the program, please chime in. I've tried to be accurate, but actual experience trumps my hypothetical analysis.)