A student athlete that thinks this through probably doesn't want employment status. They need to look at what happens to coaches mid year, end of year, etc. to see what will happen to them if they don't perform. There will be contract with buy outs, performance metrics, penalties if they leave early.
Those that are truly using this for education will not be able to do that anymore. The rug could be pulled out from under them, mid semester and they either have to pay their own way or just drop out.
It is those that see participating in college sports as only a means to get to the NFL, NBA, etc. that will ultimately destroy the advantages for those students who use this to prepare themselves for other opportunities.
And what about the members of the band, the cheerleaders, student reporters and broadcasters - those that participate in the arts etc. There are a lot of different areas where students obtain scholarships and then participate in activities funded by the university to give them that experience and exposure. Granted that is not bringing in $$'s but it is the same concept.