By Spencer Feingold
The billionaire Robert F. Smith shocked graduating seniors at Morehouse College on Sunday when he promised to pay off the entire student loan debt of the class.
"My family is going to create a grant to eliminate your student loans," Smith said while giving his commencement speech at the all-male, historically black college in Atlanta.
Smith made his fortune from investing and is the founder and current CEO of the investment firm Vista Equity, which has over $46 billion in cumulative capital commitments. He also worked in technology investment banking at Goldman Sachs in the 1990s.
With a net worth of $5 billion, Smith is the wealthiest African American in the U.S., and is twice as rich as Oprah Winfrey, according to Forbes.
For black families, "student loan debt means something a little different because we have this racial wealth gap in America, where black families have one-tenth of the wealth of white families," Natasha Alford, deputy editor at the African-American-focused news and entertainment site TheGrio, told Cheddar in an interview Monday. "This legacy of playing catch up is painful and is challenging."
Smith's gift to the nearly 400 graduating students is estimated to be around $40 million. The surprise announcement comes as the U.S. continues to grapple with over $1.5 trillion in student debt, and a generation of young Americans burdened by staggering loans.
The issue has already pushed several of the 2020 presidential hopefuls to release policies confronting the runaway costs of higher education.
"Billionaire Robert F. Smith's gift to forgive the student debts of the graduating class of Morehouse College was extremely generous. But the student crisis will not be solved by charity. It must be addressed by governmental action," Sen. Bernie Sanders (I-Vt.) said in a tweet.
Just last month, Sen. Elizabeth Warren (D-Mass.) announced a sweeping proposal to eliminate student loan debt and make all public college tuition-free. Under Warren's plan, the government would forgive $50,000 in student loans for households making less than $100,000 a year — or 95 percent of Americans with student debt, according to her campaign.
"What Robert F. Smith gave these young men is freedom. He gave the ability to invest in themselves, invest in the families, and invest in their communities," Alford said.
'He is not new to this. He is true to this.'
Smith is also a signatory of The Giving Pledge, a public commitment by the world's wealthiest people to dedicate over half of their fortune to philanthropy. The initiative was founded by Bill and Melinda Gates and Warren Buffet and includes the likes of Mark Zuckerberg and Elon Musk. A total of 191 people from 22 countries have signed onto the pledge.
"Potential is no guarantee of progress. We will only grasp the staggering potential of our time if we create onramps that empower ALL people to participate, regardless of background, country of origin, religious practice, gender, or color of skin," Smith wrote in his Giving Pledge letter in 2017.
Smith has also been lauded for purchasing the childhood home of Martin Luther King Jr. in Atlanta for the National Park Service to memorialize the site.
"He is not new to this. He is true to this," Alford said.
King's youngest daughter, Bernice, who was just 5 years old when her father was assassinated, praised Smith, saying on Twitter "what a love-power move by Robert Smith. I believe it's the start of something major." Bernice also noted that her father was a Morehouse alumnus.
"Where you live shouldn't determine whether you get educated. Where you go to school shouldn't determine whether you get textbooks," Smith said during Sunday's commencement speech. "The opportunity you access should be determined by the fierceness of your intellect, the courage in your creativity, and the grit that allows you to overcome expectations that weren't set high enough."
For full interview click here.