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Yesterday, billionaire Robert Smith made a surprise announcement during his opening speech at Morehouse College – he pledged to pay off the student loan debt of every student in the Class of 2019 in full. It’s an incredible gesture, especially from one speaker – Smith said been asked to motivate and inspire students to succeed. after graduation, and he did so by tackling the heavy debt burden which is arguably one of the biggest barriers to success these graduates would have faced. I can’t imagine that even the most meaningful opening speech has a bigger impact on a student’s life than being suddenly freed from tens of thousands of dollars in student loans. Many articles have talked about the immediate impact on students, how many opportunities have opened up for them and how they are inspired to pay it forward. But that donation did more than inspire those 400+ graduates – it deepened a conversation about student loan debt.

The student loan crisis has come to the forefront of the national conversation in recent months, particularly like several Democratic candidates of 2020 have started to put affordable colleges front and center in their campaigns. Americans currently owe nearly $ 1.6 trillion student loan debt dollars, more than auto loans or credit card debt. This is a huge number, which clearly shows that this is not a crisis that can be solved by the charitable donations of billionaires. Still, it’s a move that cements Smith’s reputation as a philanthropist and advocate.

The Morehouse College class of 2019 consists of 396 students, who have a combined estimate of $ 10-40 million in student loans. This is a figure that is close to the Smith price paid in 2015 (nearly $ 20 million) for his third house, a Malibu 6br / 9ba mansion, but still a fraction of the amount of Smith’s net worth has grown in recent years (from $ 2.5 billion to $ 5 billion). In 2018, he overtook Oprah Winfrey become the richest black person in the United States. His other notable contributions to the eight-figure range include $ 20 million at the Smithsonian National Museum of African American History and Culture and $ 50 million to his alma mater, Cornell University. Smith was the first African American to sign the Giving Pledge, the initiative launched by Bill Gates and Warren Buffett where the wealthy (mostly billionaires) pledge to donate at least half of their wealth before or at the end of their life.

Smith making this donation to a historically black college adds another layer to the conversation about student debt. Founded two years after the end of the Civil War, Morehouse College is a small, male-only college in Atlanta, Georgia. A historically black school, 95% of Morehouse College students are African American. Historically, black colleges and universities (HBCUs) have been particularly affected by the student debt crisis, as detailed in this the Wall Street newspaper item last month. Seventy-five percent of students at private HBCUs like Morehouse take out federal loans, compared to 51% at private non-HBCUs. Several factors come into play, including the fact that HBCUs tend to have smaller endowments. Whatever the type of institution, black students have 85% more debt than white students and pay it off more slowly – researchers say increased attendance at predatory for-profit colleges and declining family net wealth are possible factors. Regardless, black students are particularly affected by the student debt crisis, and this donation has brought this issue to the fore, the first step towards real change.

During his speech, Smith quoted a notable alumnus of Morehouse College: “When Dr. King said that ‘the arc of the moral universe bends toward righteousness,’ he was not saying it bends. of himself. It bends because we choose to put our shoulders together and push. ”

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