US billionaire pays off entire student debt of 2019 graduating class at historic black college

Harriet Alexander
Robert F Smith, a billionaire technology investor, was the commencement speaker at Morehouse college, the alma mater of Martin Luther King - Atlanta Journal-Constitution

The richest black man in America stunned a group of graduating students at the weekend by promising to pay off all their student debt.

“My family is going to create a grant to eliminate your student loans!” announced Robert F Smith, to scenes of jubilation at Morehouse College in Atlanta, Georgia.

Mr Smith’s gift to the all-male, historically black college is estimated to be worth around $10 million (£7.9 million). There were 396 graduates in the class, and tuition, room and board, and other costs run about

$48,000 per year, according to David Thomas, president of the college.

"I don't have to live off of peanut butter and jelly sandwiches," Aaron Mitchom, 22, a finance student, said.

Students react with joy on hearing Robert F Smith's announcement that he was paying off their debt

He has drawn up a spreadsheet to calculate how long it would take him to pay back his $200,000 in student loans - 25 years at half his monthly salary, per his calculations.

In an instant, that number vanished. Mr Mitchom, sitting in the crowd, wept.

"I can delete that spreadsheet," he said in an interview after the commencement. "I was shocked. My heart dropped. We all cried. In the moment it was like a burden had been taken off."

Mr Smith, born to a middle class family in Denver, Colorado, made his $5 billion fortune from his private equity firm, Vista Equity.

He has used his wealth to make significant donations to charitable causes – among them $50 million to Cornell University — where he got his bachelor’s degree in 1985 — to support chemical and biomolecular engineering, and African American and female students in the engineering school.

Robert F. Smith, addressing the students on Sunday

In 2017 Mr Smith joined the Giving Pledge, coordinated by Bill and Melinda Gates and Warren Buffet, through which wealthy individuals vow to give more than half of their money away to philanthropic or charitable causes.

Mr Smith’s $20 million gift to the National Museum of African American History and Culture is one of the largest by an individual donor.

The 56-year-old told the students that he was confident they would make good use of his gift. “Now, I know my class will make sure they pay this forward,” he told them.

“I want my class to look at these [alumni], these beautiful Morehouse brothers, and let’s make sure every class has the same opportunity going forward, because we are enough to take care of our own community.

“We are enough to ensure we have all the opportunities of the American Dream.”

Deionte Jones, 22, said his eyes filled with tears when he learnt his $25,000 in debt was to be paid off.

“It was a sense of a new start on life,” said Mr Jones, raised by a single mother, and the first in his family to go to university.

“It can be challenging to be an African American in this society because we sometimes don’t come from strong economic backgrounds. This lifts a huge weight off my family’s back.”

Robert F. Smith, left, laughs with David Thomas, president of the university, and actress Angela Bassett, at Morehouse College on Sunday

Jason Allen Grant, 22, said he could hardly believe his ears when he was informed his $45,000 would be paid off.

“It had been a long day,” he said. “When he said that, Oh my gosh, I perked up. My father almost passed out.”

His father, who is a banking examiner at the Federal Reserve Bank of Cleveland, was planning to work another 10 years to pay off his son’s college costs. Now, at age 57, he might walk in Monday and retire.

“I’m a third-generation college student, and we’re still having to pay loans,” said Mr Grant.

Mr Thomas, the university president, learned of the gift at the same time as the students.

“There was amazement in the room, people’s mouths dropped open,” said Mr Thomas.

“Students were looking at each other like, ‘What did he say?’ Parents hopped up to hug each other.”

He said the gift will open the door for students to follow their chosen career paths without being saddled by debt.

“It will allow them to more quickly go toward what they are passionate about,” he said. “When you move toward what your passion is, you can make your greatest contribution to the world.”

Mr Smith reminded the students that they have a debt to society.

“The degree you earn today is one of the most elite credentials that America has to offer,” he said. “But I don’t want you to think of it as a document that hangs on a wall and reflects what you’ve accomplished up till now. No.

“That degree is a contract — a social contract — that calls on you to devote your talents and energies to honouring those legends on whose shoulders you and I stand.”