On Sunday, May 19th, 396 young men wore their caps and gowns and seemed not only optimistic as Robert F. Smith gave their school's 135th commencement address, but also burdened by the debt that financed their education. Smith, currently the richest black man in America, shocked the students with a surprise message. He pledged to pay all debts for Morehouse's entire 2019 graduating class.
“On behalf of the eight generations of my family who have lived in this country we’re going to put a little fuel in your bus,” said Mr. Smith. He personally claimed the graduating seniors as his own. “This is my class, 2019, and my family is making a grant to eliminate their loans," the billionaire investor and founder of Vista Equity Partners said.
Smith's announcement made Morehouse graduates stretch their mouth and eyes wide open in disbelief then they began to hug each other. His donation comes at a time when debt is serious issue for America and American millennials. According to recent Federal Reserve data, Americans owe $1.5 trillion in student loans. It exceeds auto loan debt which is currently $1.1 trillion and the current credit card debt which is $977 billion. Moreover, African-American students are more likely than than their peers to take out federal student loans, regardless of whether they attend a public or private institution or community college, according to the Centre for American Progress.
Similarly, the center’s 2017 data analysis provided by the National Center for Education Statistics, shows more than 80% of Black students took out loans for their undergraduate education within 12 years of entering school at public and private institutions, compared to more than 60% of white and Latino students.
Jonathan Epps, 22, one of the graduating students, said he had $35,000 in student loans. Elijah Nesly Dormeus, who is the first of nine kids to graduate college in his family, owed $90,000. “It’ll sink in as the years go on. I know that for a fact,” Dormeus said.
Henry Goodgame, a 1984 Morehouse graduate who is now vice president for external relations and alumni engagement said, “I heard the words but I couldn’t believe it. Then, I looked at the audience to see and it was registering at the same time for all of us. It was an authentic no-clue-at-all look.”
In an interview with the New York Times, Mr. Goodgame called the announcement a “transformational moment.” “To have someone else say that the work our institution does is worthy of investment and reinvestment is significant," Goodgame said. “We have the population that is most vulnerable to not make it to 18. We show them you can have a fine education that is designed and built just for you, that’s more than just chemistry and physics,” he added.
Goodgame recalls that it cost him $5,000 a year to attend Morehouse in the 1980s. Now, full-time tuition is $25,368 plus additional expenses including room and board, books and other fees, to attend costs more than $48,000 - nearly ten times more.
“This is generous, no doubt,'" Anand Giridharadas, the author and outspoken critic of Billionaires, told New York Times. "But a gift like this can make people believe that billionaires are taking care of our problems and distract us from the ways in which others in finance are working to cause problems like student debt, or the subprime crisis, on an epically greater scale than this gift,” he said.
Smith's student debt pledge could total close to $40 million - an act that could help nearly 400 students liberate their families for generations to come. “Let’s make sure every class has the same opportunity going forward because we are enough to take care of our community," Smith said. "We are enough to ensure we have all the opportunities of the American dream and we will show it to each other through our actions, through our words, and through our deeds.”