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Robert F Smith's gift to Morehouse College was generous — but so are the tax cuts Trump brought in for billionaires like him
Graduates at Morehouse College in Atlanta got a big surprise last weekend when billionaire investor Robert F Smith sensationally announced that he would pay off the student loan debt of the entire graduating class.During his commencement speech, he said: "On behalf of the eight generations of my family who have been in this country, we're going to put a little fuel in your bus." He then told the graduates that his family would eliminate their debt entirely. This gift has been estimated to be worth around $40m. Naturally, social media was abuzz with reaction after a video of Smith’s speech went viral. It is undoubtedly heartening to see Smith – the richest black American with an estimated net worth of $5bn – choosing a historically black college to bestow such a gift. After all, black men still earn less than white men on average in every income group. Even when compared with white men from similar educational and economic backgrounds, black men still earn substantially less on average. For black women the figures are even worse, though sadly none will benefit from Smith’s gift, given that Morehouse is an all-male college.Following the speech, students were delighted. Speaking to CNN, Elijah Nesly Dormeus said that his mother had taken on extra jobs and a loan to help pay for his $90,000 college debt. Thankfully this burden has now been lifted.But behind this moment of celebration lies one glaring question: why is a gesture like this necessary?As of 2019, there are 45 million Americans with student loan debt and the average monthly repayment is $393 per month. Just think about all the things this money would be better spent on. Free from this debt, the students of Morehouse will now be able to start investing in their futures and contributing to the economic prosperity of their local communities.For other students, the out-of-control privatisation of American colleges continues to entrench inequality and limit social mobility. It is an absolute scandal that students in the world’s richest country should be reliant on random acts of kindness from billionaires in order to avoid crippling, lifelong debt.We can fawn over gestures like Smith’s all we like, but the reality is that this gift represents just a fraction of the money he and others in his wealth bracket will have saved from Trump’s 2017 tax cut alone. Instead, why don’t we start making billionaires pay their fair share of tax and extend the benefits of Smith’s generosity to everyone?It’s not like there’s any shortage of American billionaires. Last year, billionaires saw their wealth increase by $2.5bn a day, whereas the poorest saw their wealth fall. As of 2019, North America is home to more billionaires than any other continent, with San Francisco and New York housing more billionaires than any other city in the world. Democratic presidential candidate Elizabeth Warren has addressed this issue on the campaign trail. She has proposed making college free and rolling back college debt for 95 per cent of students using a “wealth tax”. This proposed tax would affect “ultra-millionaires”, who would be taxed an extra 2 cents on every dollar on incomes above $50m. Speaking at a CNN town hall last month, Warren said: “If we tax the 75,000 richest households an extra 2 cents, we can do universal childcare for every baby zero to five, universal Pre-K, universal college, knock back the student debt burden for 95 per cent of graduates and still have nearly a trillion dollars left over.”The proposal received rapturous applause, and little wonder, because even Democrats have been cautious when introducing proposals for tackling the student loan crisis. Fellow Democratic candidate Pete Buttigieg, for example, has argued against free college, suggesting that is subsidises higher earners. Bernie Sanders’s universal college policy was partly responsible for young voters flocking towards him in the 2016 primary race against Hillary Clinton, who later adopted his policy in her run-off against Trump. Too often, particularly on social media, the idea of people crowdsourcing for money and getting a lucky break is normalised. Americans routinely crowd-fund for life-saving operations. Teachers appeal for funds to buy their students school supplies or take them on field trips. The idea of parents putting cash in a jar for their child’s future college education has been romanticised in American films and television shows for as long as I can remember. In reality, there’s nothing sentimental about someone requiring the generosity of others for basic needs like education and healthcare. Viral stories like Smith’s fetishise obscene wealth and the farcical lie that is the American dream, while the brutal economic injustices that created the need for such gestures are forgotten.Smith might have improved the lives of a minority – and thank goodness for that. But shouldn’t take a viral video for students to access the benefits of a debt-free education. With proper legislation this can and must become the norm.
A billionaire investor has pledged to eliminate the student loan debt for everyone graduating this year from a college in the US state of Georgia, at a cost of some $40m (£31m).
Robert Smith, a billionaire technology investor and philanthropist, announced to 400 graduating seniors at Morehouse College on Sunday morning that he planned on giving back to the historically black college in the form of the grants.
“On behalf of eight generations of my family that have been in this country, we’re gonna put a little fuel in your bus,” said Mr Smith, the founder and CEO of Vista Equity Partners, a private equity firm that specialises in technology issues.
“This is my class, 2019. And my family is making a grant to eliminate their student loans,” he continued.
Mr Smith said that he hopes the graduates will “pay it forward”, and that he hopes “every class has the same opportunity going forward".
Morehouse College president David A Thomas said the gift would have a profound effect on the students’ futures.
“Many of my students are interested in going into teaching, for example, but leave with an amount of student debt that makes that untenable,” Mr Thomas told the Associated Press. “In some ways, it was a liberation gift for these young men that just opened up their choices.”
The donation comes as the US experiences a student loan debt crisis, with the amount of debt held by former college students reaching record highs.
AP contributed to this report
Yahoo News 
