Billionaire philanthropist Robert F. Smith pledged to pay off all of the student loan debt for every member of Morehouse College’s 2019 graduating class during his commencement speech on Sunday.
In the span of seconds, the CEO and Chairperson of Vista Equity Partners changed the lives of the 430-some graduates of the all-male, historically black college in Atlanta.
The total price tag of Smith’s generosity will amount to approximately $40 million.
‘On behalf of the eight generations of my family who have been in this country, we’re gonna out a little fuel in your bus,’ Smith said.
‘Now I’ve got the alumni over there. This is a challenge to you, alumni. This is my class, 2019. And my family is making a grant to eliminate their student loans.’
Smith’s gift will go a long way toward combating wealth disparity in these young black men’s lives, according to analysis of yearly data compiled by the National Longitudinal Study of Youth 1997 Cohort.
The cohort consists of a nationally representative sample of over 8,900 respondents who were interviewed nearly every year for the past 22 years, according to NBC.
In a study titled ‘Racial Disparities in Student Debt and the Reproduction of the Fragile Black Middle Class,’ researchers examining data from those interviews concluded that nearly 25 percent of black-white wealth gap can be attributed to student debt.
Billionaire Robert F. Smith (pictured) pledged to pay off all of the student loan debt for every member of Morehouse College’s 2019 graduating class during his commencement speech on Sunday in Atlanta
The total price tag of Smith’s generosity will amount to approximately $40 million. Students are shown rejoicing after Smith’s announcement
Seated immediately behind billionaire technology investor, the shocked faces of Morehouse College faculty, staff and administrators showed their acknowledgement at the tremendous barrier to success that had been lifted from these young men’s lives.
One man mouthed the word, ‘Wow!’ before rising to his feet to give Smith and his incredibly generous announcement a standing ovation.
Once the gravity of that sentence sunk in for everyone, the crowd erupted in cheers.
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. According to his calculations, if he allotted half of his monthly salary to the bill he could pay it all off in 25 years.
In an instant, that number vanished. Mitchom, sitting in the crowd, burst into tears.
‘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.’
In the span of seconds, the CEO and Chairperson of Vista Equity Partners changed the lives of the 430-some graduates of the all-male, historically black college in Atlanta
Smith’s gift will go a long way toward combating wealth disparity in these young black men’s lives, according to analysis of yearly data compiled by the National Longitudinal Study of Youth 1997 Cohort
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 finish line.
‘It takes a village,’ she said. ‘It now means he can start paying it forward and start closing this gap a lot sooner, giving back to the college and thinking about a succession plan’ for his younger siblings.
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.’
Student loan repayment is problematic for all races, with less than half of indebted students having paid even $1 toward the principal balance of their loans within five years of entering repayment, according to the Department of Education.
But on average, the situation is far worse for black people, who pay their loans down at a rate of four percent each year while white student borrowers tend to pay their loans down at a rate of 10 percent annually.
As a result, it’s estimated that 15 years after graduation, black adults are 185 percent more indebted due to student loans than their white adult counterparts.
Morehouse said it is the single largest gift the college has ever receive since its founding in 1867 in the basement of Springfield Baptist Church in Augusta by the Reverand William Jefferson White.
Smith, who received an honorary doctorate from Morehouse during the ceremony, had already announced a $1.5 million gift to the school.
Smith said he expected the recipients to ‘pay it forward’ and said he hoped that ‘every class has the same opportunity going forward.’
Both Smith and actor Angela Bassett received honorary degrees from the college on Sunday.
Morehouse College president David A. Thomas (center) said the gift would have a profound effect on the students’ futures.Robert F. Smith (left) laughs with Thomas and actor Angela Bassett (right) at Morehouse College on Sunday