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Somebody claims their kid plays D1 hockey but doesn't understand how scholarships are funded. Taxpayers do not fund D1 athletic departments. College athletic departments fund their scholarships through donations, endowments, revenue from TV, ticket sales, concessions, corporate sponsorship, and other revenue sources. Now, one of those revenue sources can be direct institutional support which come in the form of student activity fees, so one could claim the school is paying for athletics, but it is a stretch to say taxpayer funds from the state house go directly to athletics.
What people need to understand about college athletics is that it is, for many, the window through which they perceive the school. Think of it as one of the marketing arms of the institution. It's no coincidence that after a major D1 school exhibits athletic success like, say, a program wins a football championship, like a Clemson or Alabama, that the school experiences a spike in applications to the university. Athletic success increases the profile of the school and leads to increased applications and enrollment. Viewed that way, direct institutional support can be justified if it is part of a comprehensive plan to increase the profile of the school.