Over-signing:
Football teams are only permitted to enroll 25 scholarship athletes per calendar year and can only have 85 scholarship players on their team at any given time. This doesn't stop teams from signing more than their allotment of players.
Teams over-sign for a variety of reasons. Some players will not qualify academically and will never step foot onto campus. Some coaches were not able to sign 25 prospects the year before and are trying to make up for it. Other schools are trying to add depth to their teams in years where there is a large number of quality recruits.
Regardless of reason, here is how oversigning works:
A team must sign less than its allotment of 25 scholarship players the year before.
Extra players must enroll in December, prior to National Signing Day, and be on campus for the Spring semester.
or
Any team that exceeds the maximum 25 scholarships, must have additional players grey shirt.
Over-signing allows teams to build depth. It also allows schools to prepare for potential academic casualties. It is a practice that has been around, particularly in Southern schools, for years. It will not be going away any time soon.
These additional players do indirectly affect a team's recruiting class ranking. While not all players are counted toward the ranking, the weaker prospects are hidden by the stronger ones. This can give an inaccurate representation of the overall quality of a class.
Even teams that are not oversigned encourage players to enroll early if their are scholarships available.
Not only does it give those players the opportunity to get a head start on the system, conditioning, college experience, but any player that enrolls in December will not count towards a teams 25 annual scholarships. Technically, scholarships for early entries belong to the previous year's class.
This allows teams to get a maximum on how many players they can over-sign the next year.
Grey-shirting:
While most people are familiar with the phrase "red-shirt" most people have no idea what a grey-shirt is. In fact, the NCAA does not even acknowledge the term. In a way, grey-shirting is like the U.S. Army's Delta Forceeveryone knows it's their, but the governing body doesn't acknowledge it's existance.
Here is how grey-shirting works:
A player commits to a team that is over-signed.
That player either doesn't go to school in the fall, or enrolls part-time and pays their own way. They are not officially on the team.
In January of the following year, that player enrolls full-time and officially joins the team. They are technically part of the recruiting class for the following year.
Grey-shirting is a way for schools to skate around the recruiting rules. It allows schools to over-sign, regardless of how many prospects they signed the previous year.
Every player has a five year window to play four seasons. That window starts the second a player is enrolled in college full-time or are on scholarship. Since the player is not enrolled full time and is not on scholarship, their "NCAA clock" has not started.
Once they join a team, they still have the full five year window and the ability to red-shirt if they so choose.
While grey-shirting, players are not on the team.
They can not practice or condition with the team. They can not be given any advantage not extended to the normal student body. Grey-shirts are not allowed at team meetings or functions either. For all intents they are essentially, regular students.
Conclusion:
These are important things to consider as far as a team's future is concerned. Large classes can sway the rankings, but they may be able to create additional, unplanned depth. When looking at your favorite team's recruiting class ranking, it is important to factor these things in.