In May, graduates of Morehouse College received their degrees from college, but they also received news that they will enter society entirely free of student loan debt. Robert F. Smith, billionaire and owner of private equity firm Vista Equity Partners, announced his pledge to cover each and every dollar of student loans for everyone in that graduating class. Now, he has expanded that donation to include any student loan debt acquired by the parents of the individuals in that graduating class.
According to Bloomberg, Smith plans to pay the federal loans taken by the students’ parents, adding to a tab that already amassed over $34 million. Private loans gifted by the school and federal and state loans will also be covered by Smith.
David Thomas, Morehouse’s president, said this action will hopefully inspire recipients to follow in Smith’s footsteps and pay it forward.
“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 stated.
The HBCU aims for the plan of action to be completed by 2020.
These graduates will serve as a natural case study for the future. Having the opportunity to observe and monitor the financial well-being of more than 100 minority students who received a completely free college education could reveal a lot about whether the cost of college is worth it or not. It may also inspire other billionaires to step forward to provide the same.
Smith envisions this program serving as a platform for other colleges and universities to take action against the rising student debt in the US.
“To receive gifts from alumni and other supporters that can offset the burden of student loans and give students the freedom to pursue their dreams, the capital to invest in the economic growth of their families and the time that they can give back meaningfully to strengthening their communities,” Smith said.
It will be very interesting to see impact the donation has on the class of Spring 2019 from Morehouse. Many economists believe the lack of debt will lead to them buying a house faster, and could even potentially lead to them retiring sooner. By adding the parents of these students to Smiths’ generous donation, that impact will now become even greater as parents will now have ongoing debts alleviated and can use those funds to possibly “pay it forward.”