A billionaire technology investor and philanthropist says he will provide grants to wipe out the student debt of the entire graduating class at Morehouse College in the United States – an estimated $40m.
Robert F Smith, this year’s commencement speaker, made the announcement Sunday morning while addressing nearly 400 graduating seniors of the all-male historically black college in Atlanta.
Smith is the Founder and CEO of Vista Equity Partners, a private equity firm that invests in software, data, and technology-driven companies.
“On behalf of the eight generations of my family that have been in this country, we’re gonna put a little fuel in your bus,” Smith told the graduates.
“This is my class, 2019. And my family is making a grant to eliminate their student loans.”
The announcement elicited stunned looks from faculty and students alike, before the graduates broke into the biggest cheers of the morning. Morehouse said it was the single largest gift to the college.
Smith, who received an honorary doctorate from Morehouse during the ceremony, had already announced a $1.5m gift to the school.
The pledge to eliminate student debt for the class of 2019 is estimated to cost $40m.
Smith said he expected the recipients to “pay it forward” and said he hoped that “every class has the same opportunity going forward”.
In the weeks before graduating from Morehouse on Sunday, 22-year-old finance major Aaron Mitchom drew up a spreadsheet to calculate how long it would take him to pay back his $200,000 in student loans – 25 years at half his monthly salary, per his calculations.
In an instant, that number vanished. Mitchom, sitting in the crowd, wept.
“I can delete that spreadsheet,” he said in an interview after the commencement.
“I don’t have to live off of peanut butter and jelly sandwiches. I was shocked. My heart dropped. We all cried. In the moment it was like a burden had been taken off.”
His mother, Tina Mitchom, was also shocked. Eight family members, including Mitchom’s 76-year-old grandmother, took turns over four years co-signing on the loans that got him across the finishing line.
Morehouse College president David A Thomas said the gift would have a profound effect on the students’ futures.
“Many of my students are interested in going into teaching, for example, but leave with an amount of student debt that makes that untenable,” Thomas said in an interview.
“In some ways, it was a liberation gift for these young men that just opened up their choices.”
Smith, whose fortune has been estimated at $2.5 billion, was relatively unknown before making headlines as the second-largest private donor to the National Museum of African American History and Culture in Washington. His gift of $20 million was beaten only by Oprah Winfrey’s of $21 million.
Student loan debt in the USA reached its highest level in history in 2019, totalling about $1.5 trillion among 44 million borrowers in the US.