Billionaire pays $34 million to wipe out graduating class’ college debt
Billionaire Robert Smith has made good on his promise to pay off the student loan debt of the entire 2019 graduating class at Morehouse College by donating $34 million to the historically black men’s school in Atlanta.
In May, Smith stunned students, their parents and school officials when he announced his offer during commencement.
His multimillion-dollar donation will be distributed through the school’s new Student Success Program. In addition to paying off the debt of the 2019 graduates, this program will solicit and accept donations to help reduce or eliminate the student loan debt of other Morehouse students, school president David A. Thomas said.
More than 400 graduates from Morehouse’s Class of 2019, as well as their parents and guardians, will have their student loans paid thanks to Smith’s gift, which spurred others to give, as well.
School wants to gauge social impact of debt elimination
What Smith did “inspired other individuals to contact us to see if they could take part in the effort to reduce student debt,” Thomas told CNN. “Most of the people who were calling didn’t have the kind of (money) that he had. So, we wondered what vehicle could we create” to let others help “in a way that’s customized to their means.”
There’s also a research component to the Student Success Program, which the school will use to track the social impact of student loan reduction or elimination. Members of the Class of 2019 who agree to participate will be studied to see how their lives change when their student loans are eliminated or significantly reduced.
“It’s a great controlled experiment,” Thomas said, noting that the lives and career choices of the Class of 2019 will be compared to the Class of 2018.
A Morehouse student usually graduates with between $35,000 to $40,000 in loan debt, the school said in a press release.
Stunning act of generosity
The Morehouse seniors and their families were shocked when Smith made his announcement.
“We’re looking at each other like, ‘Is he being serious?’ That’s a lot of money,” salutatorian Robert James said in May, after Smith spoke.
The announcement was met with a standing ovation and chants of “MVP!”
In addition to putting, as Smith called it, “a little fuel in (the graduates’) bus,” he expected the recipients of his generosity to use it to help others.
“Now, I know my class will make sure they pay this forward,” he continued. “I want my class to look at these (alumni) — these beautiful Morehouse brothers — and let’s make sure every class has the same opportunity going forward, because we are enough to take care of our own community. We are enough to ensure we have all the opportunities of the American dream.”
Smith has done this before
Smith, founder of the investment firm Vista Equity Partners, is worth about $5 billion, according to Forbes, which reports he is the richest black person in America.
He was a chemical engineer for Goodyear and Kraft before attending business school. He worked for Goldman Sachs, specializing in technology investments, before starting Vista Equity in 2000.
In 2016, Cornell University, one of his alma maters, renamed its chemical and biomolecular engineering school in honor of the Austin, Texas, investor after he committed $50 million to the school. He’s also donated millions to cancer research and the arts.
His Fund II Foundation provides grants under five pillars: preserving the African-American experience; safeguarding human rights; conserving the environment; providing music education; and sustaining “critical American values such as entrepreneurialism,” the organization says.
In 2017, Smith signed the Giving Pledge, an effort spearheaded by billionaires Warren Buffett and Bill and Melinda Gates to convince wealthy Americans to give away half of their fortunes.
So, will Morehouse’s next commencement speaker feel any pressure to match Smith’s generosity?
“I don’t know who the next speaker will be,” Thomas said, “but I do know that it puts pressure on me to convince this person that they don’t have to give $34 million to give this speech.”
CNN’s Eliott C. McLaughlin contributed to this story.