Finance | September 22, 2019 6:00 am

How Billionaire Robert F. Smith Is Paying Off One Graduating Class’s Student Loan Debt

Smith made the announcement at Morehouse College earlier this year

Morehouse College
Graves Hall at Morehouse College.
Thomson200/Creative Commons

At Morehouse College’s 2019 graduation, commencement speaker Robert F. Smith made a surprising announcement: he’d be paying the entire student loan debt of the graduating class. Smith is known for his philanthropy, which includes donations made to cancer research and arts organizations, along with multiple institutions of higher learning. With this gesture, however, he changed the lives of students in that graduating class — and helped spark a debate about the role of student loan debt in contemporary American society.

A recent article in The New Yorker by Hua Hsu explored the ongoing discussion about student loan debt and its effect on the nation’s finances. “Without debt hanging over their heads, how many Morehouse grads will become teachers, or artists, or bankers?”

When Smith made his announcement, he didn’t get into the specifics of it. Now that a few months have passed, the details have been revealed. In order to pay off the class’s student loan debt, Smith paid Morehouse a total of $34 million. CNN has more details

His multimillion-dollar donation will be distributed through the school’s new Student Success Program. In addition to paying off the debt of the 2019 graduates, this program will solicit and accept donations to help reduce or eliminate the student loan debt of other Morehouse students, school president David A. Thomas said.

Smith’s donation also prompted others to take action: Thomas told CNN that other people had reached out to the college to see what they could do to contribute. Hence the Student Success Program; CNN reports that “the school will use [it] to track the social impact of student loan reduction or elimination.” It’s possible that Smith’s donation to one institution of higher learning could have a ripple effect on higher education across the country.

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