My idea for some time now on paying players has been as follows. At most schools that I know of, student-employees are allowed to work 20 hours per week. So, during the season, players get paid for working 20 hours per week, at the same pay rate as any other student employee on campus.
Yes, there will be many schools that cannot afford to do this, especially if the schools is responsible for paying the athletes. So, to deal with that situation, either have this rule apply to Division 1 schools only, or as guinpen suggested, have the NCAA contribute to the pot from which athletes would be paid.
For a port like football, athletes would be paid during the regular season, and also spring practice, as spring practice is mandatory.
If a school is not able to afford to pay the athletes, then said school just drops down to D2 or D3. Or, the idea proposed by guinpen of schools at D2 and D3 having a lower amount required to pay athletes could also work. Pay the athletes with a monthly stipend based. There are ways this can be done, if and when the NCAA and it's member institutions want to admit they ARE in the business of athletics.
As it is right now, the 5 major football playing conferences are pretty much working on a plan to separate from the rest of D1. I actually see this as something positive. Being in Vegas now, I can tell you that UNLV would be much better of from a $$$$$$$$ standpoint and competitive standpoint if they were FCS in football. Same is pretty much true for the entire Mountain West, with exception of Boise. I believe the same is true for the MAC, with the exception of maybe NIU. The reason I single out NIU, is because they have proven to be a consistent quality program now, and done so with multiple HC's.
So, at least in football, I see things eventually getting to a point where there are the 5 major conferences, each having 12-14 teams, along with BYU and Notre Dame.
Basketball is a bit different, but I still believe there are way to many teams in the top division of D1. And, I can remember back in the 90's, Tressel talking about the possibility there would ultimately be a 1AA/FCS equivalent for basketball.
As for the Northwestern lawsuit, at least at this time, it pertains ONLY to Northwestern, and is in regards to paying the cost of medical bills for injuries sustained while playing sports at Northwestern.
The other lawsuit, which was filed by Ed O'Bannon among others, is in regards to athletes being able to receive money when schools and the NCAA use their image and likeness for video games, and might also be for any/all merchandise sells. And, I believe the players do deserve a cut of that money.