US billionaire promises to pay off 400 students’ loans

NEW YORK: Not even Morehouse College administrators knew the announcement was coming. Addressing the college’s class of 2019, Robert F Smith, a man who is richer than Oprah Winfrey, made a grand gesture straight out of the television mogul’s playbook.
“My family is going to create a grant to eliminate your student loans,” he said Sunday, bringing the approximately 400 students in caps and gowns to their feet. “This is my class,” he said. In January, Smith, a billionaire, donated $1.5 million to the college to fund student scholarships and a new park on campus. He received an honourary degree at the graduation on Sunday.
The value of the new gift is unclear because of the varying amounts the students owe, but the money will be disbursed through Morehouse College and will apply to “loans students directly have for their college education,” a representative for Smith said.
A private equity titan, Smith founded Vista Equity Partners in 2000. After making a fortune in software, he was named the nation’s richest African-American by Forbes. According to that financial magazine, Smith’s estimated net worth is $5 billion, making him richer than Winfrey, who previously held the title of the wealthiest black person.
Smith studied chemical engineering at Cornell University and finance and marketing at Columbia Business School. Although he shunned the spotlight for many years, Smith has recently embraced a more public role, speaking at the World Economic Forum in Davos, Switzerland, and making major charitable contributions. Cornell named its chemical and biomolecular engineering school for him after he announced a $50 million gift, and he has made major donations to the National Museum of African American History and Culture. He started the Fund II Foundation, which is focused in part on preserving African American history and culture, and signed the Giving Pledge, a campaign through which wealthy individuals and families commit more than half their wealth to charitable causes, either during their lifetimes or in their wills.
Sunday’s announcement came amid growing calls to address the crushing burden of student loan debt in the US, which has more than doubled in the past decade.
For the students at Morehouse, an all-male, historically black college in Atlanta that costs about $48,500 per year to attend, the gift could be transformative, especially in the unsettled years after graduation. In an interview with the Atlanta Journal-Constitution, Elijah Dormeus, a 22-year-old business administration major carrying $90,000 in student debt, said: “If I could do a backflip, I would. I am deeply ecstatic.”