The billionaire promised the graduates they could start their professional lives free of student loans after receiving an honorary degree from the historically black all-men’s college in May. His donation, channeled through the new Student Success Program, will help more than 400 students from the class of 2019.
“This liberation gift from Robert Smith -- the first of its kind to be announced at a graduation in higher education -- will be life-changing for our new Morehouse men and their families,” President David A. Thomas said in a statement. “It is our hope that our graduates will use their newfound financial freedom to pursue their career goals, to lead and serve the community, and to remember the spirit of the gift given to them.”
According to the U.S. Department of Education, America’s student loan debt currently sits at a whopping $1.6 trillion and exacerbates the wealth gap between African Americans and other groups.
The U.S. Census reports that nationwide, black households have the lowest median net worth, trailing behind Asian, white, and Latin Americans respectively, with economic status playing a huge role in the ability to repay loans.
Recipients of Smith’s generous endowment will be encouraged to take part in a study that will track what they do with their newfound freedom.
According to Morehouse, typical student loan debt at graduation is between $35,000 and $40,000, which is higher than the average for historically black colleges and universities.
United Negro College Fund research shows that graduates from the schools borrow an average $26,266, nearly twice as much as those at other institutions. One in four take out loans totaling $40,000 or more to attend college.
“Morehouse’s program to provide debt relief to new graduates is a fund-raising opportunity that should be studied and duplicated nationally,” said Michael L. Lomax, president of the United Negro College Fund. “The impact of such a gift, particularly for minority or economically disadvantaged families, could accelerate the growth of a more diverse and robust middle class.”
Morehouse alumni who graduated in May or finished their degree requirements during summer school in 2019, as well as their parents or guardians, are eligible to receive gifts in the inaugural offering from the Morehouse College Student Success Program.
Smith’s donation will cover the full payment of student loans and interest for education balances as of August 28, 2019, according to the Department of Education. The six types of loanseligible for repayment through his gift are federal subsidized loans, federal unsubsidized loans, Georgia Student Access Loans, Perkins Loans, Parent Plus Loans and private student loans processed through Morehouse College.