Presbyterian College (Clinton, SC) is the smallest Division I FCS (Football Championship Subdivision, formerly Division I-AA) school, with 1200 undergraduates.
The smallest Division I FBS (Football Bowl Subdivision, formerly Division I-A) school is the University of Tulsa, with 2756 undergraduates. Rice University is the second smallest, with 3054, and Wake Forest University is the third smallest, with 4412.
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A college or university's ability to compete in division 1 athletics does to depend on size but number of varsity sports offered. These schools must field 7 women's teams and 7 men's teams (or 8 women's and 6 men's), and at least two of these for females and males must be team sports. It goes to reason that larger schools with larger budgets dominate division 1 but there are many small schools that also compete in this "upper" division.
For all of Division 1, both 1-A (FBS) and 1-AA (FCS), that is Presbyterian College in Clinton, South Carolina who lists their enrollment at 1200. They play football in the Big South Conference.
Presbyterian College (Clinton, SC) is the smallest with approximately 1200 undergraduates. PC's also has the unique nickname of "the Blue Hose" and a mascot of a Scotsman.
1) Presbyterian College (Clinton, SC)
2) Wofford College
3) Davidson College
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Rice University is the second smallest university that competes in Division 1 athletics. Rice was founded in 1912, and has just over 3,800 undergraduate students.