Division III is the third highest level of intercollegiate athletics sanctioned by the National Collegiate Athletic Association in the United States. "D-3" schools focus primarily on academics and only offer sports teams as a means of recreation in contrast to the highly competitive Division I schools.

Under NCAA rules, D-3 schools are not allowed to offer athletic scholarships. D-3 schools, which are typically small, generally do not have athletic budgets large enough to allow for large stadiums, sophisticated training facilities, or long-distance travel. Some larger schools, such as the members of the University Athletic Association conference ("The Nerdy Nine"), participate in Division III to demonstrate a commitment to academics over athletics.

Eight D-3 schools do currently offer scholarships in a capacity as grandfathered schools which traditionally participated in the highest levels of single sports prior to the tiering of schools into divisions. These teams compete at the Division I level, while the remainder of their athletic program remains D-3. They are Clarkson University (men's and women's ice hockey), Colorado College (men's ice hockey and women's soccer), Hartwick College (men's soccer, women's water polo), Johns Hopkins University (men's and women's lacrosse), College at Oneonta (men's soccer), Rensselaer Polytechnic Institute, (men's ice hockey and adding scholarships in women's ice hockey in 2005), Rutgers at Newark (men's volleyball), and St. Lawrence University (men's and women's ice hockey). Each school has the right to offer scholarships in one men's and one women's sport. These schools prefer to enjoy the characteristics of having a small, academically focused athletic program while maintaining competitive ability in their premier sport(s).

In 2003, the Division III Presidents' Council, led by Middlebury College President John McCardell, acted to curtail the rights of these schools to award athletic scholarships at the Division I level through NCAA Proposal 65-1. This proposal was rejected by a majority vote of Division III school Presidents in January 2004.