When philanthropist and entrepreneur Robert F. Smith offered to pay the entire balance of the outstanding student loans for Morehouse’s most recent graduating class, not only did the gift eliminate a burden from the backs of hundreds of students but it also sparked a much-needed conversation about student debt and its disproportionate impact on black college students.
During a Friday press conference, Morehouse College announced the final tally for Smith’s generous donation:
More than 400 students, parents, and guardians of the Class of 2019 will benefit from Smith’s act of kindness. While Smith’s largesse is embarrassing to me because I refused to donate the change from a recent trip to the grocery store to the Sick Children With Sad Kittens Adoption Fund (to be fair, I couldn’t tell if the money went to the kids or the kittens) his donation will also change the future for hundreds of HBCU graduates.
Smith, the founder, chairman, and CEO of Vista Equity Partners, shocked Morehouse’s faculty and students when he announced that he would be paying of the graduates’ student debt during his address at the school’s commencement ceremony in May.
The money will be paid directly to the loan servicers from the college’s newly-created Morehouse Student Success Program. The gift also includes $400,000 to use to research ways to invest and curb student loan debt. President David A. Thomas noted that the grant will pay off loans taken out by both students and parents.
The school has been working with the Department of Education and loan servicers and determined that the inaugural gift will cover the full payment of principal and interest for federally subsidized loans, federal unsubsidized loans, Georgia Student Access Loans, Perkins Loans, Parent Plus Loans, and certain private student loans processed through Morehouse College.
“This liberation gift from Robert Smith—the first of its kind to be announced at a graduation in higher education—will be life-changing for our new Morehouse Men and their families,” Thomas said in a statement. “It is our hope that our graduates will use their newfound financial freedom to pursue their career goals, to lead and serve the community, and to remember the spirit of the gift given to them by paying it forward to support the education of future classes of Morehouse Men.”
Thomas added that Smith’s gift has benefitted the college in a number of ways. Aside from placing HBCUs at the center of the debate on the rising student debt, he revealed that other philanthropists—both large and small—have been inspired by Smith and contacted the school to see how they could contribute to this program. A few of the students indicated that the program enabled them to attend graduate school now that they are unburdened by student debt.
At Morehouse, the student loan debt threshold at graduation is between $35,000 and $40,000, which is higher than the average for HBCUs. According to UNCF research, HBCU graduates borrow nearly twice as much—$26,266 on average—than non-HBCU students. And one in four HBCU students borrows $40,000 or more to attend college.
Collectively, Americans owe 1.5 trillion dollars in student loans and that debt is disproportionately owed by black students. According to the National Center for Education Statistics, twelve years after finishing college, the average black graduate owes 113 percent of their original student loan debt while white borrowers owe 65 percent of their original debt.
“Morehouse’s program to provide debt relief to new graduates is a fund-raising opportunity that should be studied and duplicated nationally,” said Michael L. Lomax, president, and CEO of the United Negro College Fund. “The impact of such a gift, particularly for minority or economically disadvantaged families, could accelerate the growth of a more diverse and robust middle class.”
Smith employs over 60,000 people worldwide and oversees a portfolio of more than 50 software companies. He is also known for his generous support of organizations that focus on black culture, education and human rights, including his $20 million gift that helped the National Museum of African American History and Culture open its doors.
But what has he done for the depressed kitten orphans?