Billionaire tells 400 college grads he'll pay their student loans
What's the story
The graduating class at Morehouse College was left pleasantly surprised when the speaker at their commencement ceremony paid off their student loans, estimated up to $40 million! Robert F. Smith, a billionaire technology investor, and philanthropist, made the announcement on Sunday in front of about 400 graduating seniors of Morehouse College, a private, all-male, historically black college based in Atlanta, Georgia.
Details
Smith's announcement left students, faculty shocked
"On behalf of the eight generations of my family that have been in this country, we're gonna put a little fuel in your bus," Smith, the Founder, and CEO of a private equity firm Vista Equity Partners, said, "This is my class, 2019. And my family is making a grant to eliminate their student loans." Smith's announcement left both students and faculty shocked.
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Smith expects students to pay the gift forward
As chants of "MVP" reverberated through the audience, Smith continued, "I know my class will make sure they pay this forward," in hopes that the black community looks after itself. "We're enough to ensure that we have all the opportunities of the American dream," Smith added, "And we'll show it to each other through our actions and through our words and through our deeds."
Twitter Post
Morehouse CMO shares video of Smith's address
Right after @RFS_Vista tells the Class of 2019 he will cover their student loans #MorehouseGrad2019 #MVP @Morehouse pic.twitter.com/wMD1DfOTfT
— José Mallabo (@JoseMallabo) May 19, 2019
Debt
Morehouse graduates had an average debt of $30,000-40,000
According to college officials, students averaged debt of $30,000-40,000. Speaking to AP, 22-year-old finance major Aaron Mitchom revealed that he had created a spreadsheet calculating how long it would take him to repay his debt, which amounted to $200,000. He computed that at half his monthly salary, it would still take him 25 years. After Smith's announcement, Mitchom said, "I can delete that spreadsheet."
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'My heart dropped. We all cried,' says Mitchom
"I don't have to live off of PBnJ sandwiches. I was shocked. My heart dropped. We all cried. In the moment it was like a burden had been taken off," Mitchom added. Reportedly, eight family members took turns co-signing his student loans over four years.
College response
It's a liberation gift for these young men: College president
Morehouse said it's the single largest gift to them. Smith also announced a $1.5 million gift to Morehouse. "Many of my students are interested in going into teaching, for example, but leave with an amount of student debt that makes that untenable," college president David A. Thomas said. "In some ways, it's a liberation gift for these young men that opened up their choices."
Information
Smith has a net worth of $5 billion
According to Forbes, Smith's net worth is $5 billion. Founded in 2000, Vista Equity Partners invests in software, data, and technology-driven companies. Vista currently manages over $46 billion in investments, overseeing a portfolio of 50+ software companies that employ 60,000+ people worldwide.
History
Smith worked at Kraft General Foods, Goldman Sachs before
Smith (56) has a BS degree in chemical engineering from Cornell and an MBA from Columbia Business School. He worked at Kraft General Foods and Goldman Sachs, before establishing Vista. In 2017, he became the first African-American to sign the Giving Pledge, a philanthropy group of the world's wealthiest. In 2016, he donated $20 million to the NMAAHC museum and $50 million to Cornell.