Hats in the air and tears at tycoon’s $40m gift
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 $40million (£31million). There were 396 graduates in the class, and tuition, room and board, and other costs run to about $48,000 (£38,000) per year, according to David Thomas, the president of the college.
“I don’t have to live off peanut butter and jelly sandwiches,” Aaron Mitchom, 22, a finance student, said.
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. Mitchom, sitting in the crowd, wept. “I can delete that spreadsheet,” he said. “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 $5billion fortune from his private equity firm, Vista Equity.
He has used his wealth to make significant donations to charitable causes – among them $50million 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.
In 2017, Mr Smith joined the Giving Pledge, coordinated by Bill and Melinda Gates and Warren Buffett, through which wealthy individuals pledge to give more than half their money away.
Mr Smith’s $20million 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. “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 debt would 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.”
Mr Thomas learnt 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.”
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. “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.”