The "Helping Undergraduate Students Thrive with Long-Term Earnings Act" (HUSTLE Act) introduces tax-exempt NIL investment accounts for student-athletes. These accounts enable eligible athletes to save income earned from their name, image, and likeness, such as through endorsements and licensing. Contributions, which must be in cash from qualified NIL income, can be excluded from the athlete's gross income and self-employment taxes, up to the annual gift tax exclusion amount.

Distributions from these accounts are generally taxable. They are taxed as ordinary income if taken before the athlete graduates or transfers to a non-participating institution. However, distributions made after graduation or transfer to a non-participating institution may be taxed at the long-term capital gains rate, up to an annual limit, with any excess taxed as ordinary income. An additional 10% tax applies to non-qualified distributions, unless they are used for specific qualified expenses, which include:

Career transition costs (e.g., professional training, moving expenses)
Qualified higher education expenses
Qualified medical expenses exceeding 7.5% of adjusted gross income

The bill also permits rollovers between NIL accounts and allows for the conversion of NIL accounts into individual retirement accounts (IRAs) or Roth IRAs, with a lifetime cap of $35,000, once an athlete has ceased to be eligible for at least one year. Furthermore, the legislation mandates that trustees provide educational materials on financial planning and investing to account holders.

Beyond NIL accounts, the HUSTLE Act significantly amends the Sports Agent Responsibility and Trust Act (SPARTA) to enhance protections for student-athletes. It introduces new definitions for athletic entities and prohibits specific agent conduct, such as charging fees exceeding 5 percent of an endorsement contract's value or enticing athletes with misrepresentations. Agents are required to register with a state and certify their registration to athletic associations, which must maintain a searchable database of certified agents.

Crucially, the bill establishes a private right of action, allowing current or former student-athletes to sue agents for violations of SPARTA. This provision enables athletes to seek actual damages, attorney's fees, and other relief. It also invalidates pre-dispute arbitration agreements and joint action waivers, ensuring athletes can pursue their claims in court.