Great, but let’s find a better way to pay off student loans
As commencement speeches go, this one was definitely not a snoozer. Billionaire investor Robert F. Smith told the Morehouse College graduating class of 396 seniors — to their total surprise — that he and his family would wipe out their student debt. The graduates of the all-male historically black college in Atlanta took a minute to process the announcement of that extraordinary gift before bursting into cheers on Sunday. And beyond the Morehouse campus, whose heart didn’t leap a little at the news of a commencement speech that sent off graduating
seniors not just with the standard inspirational words about being your best self (or whatever), but with the peace of mind of knowing that they will start the rest of their lives free of student debt?
With an estimated net worth of $5 billion, Smith, the chief executive of a private equity firm and a longtime philanthropist, will easily be able to wipe out the estimated $10 million to $40 million of student loan debt carried by the class of 2019 at Morehouse. And we wouldn’t discourage any other billionaire commencement speaker from following his example.
But the grim reality is that college students around the country are awash in $1.5 trillion in loan debt. It would take more than half the combined net worth of all 607 billionaires in the United States to eradicate the mountain of U.S. student debt.
That’s the task we as a country should be tackling. Sen. Bernie Sanders, I-Vermont, has been talking about taxing stock trades to cover the cost of tuition and fees at public colleges since he ran for president in 2016. He would also cut interest rates on student loans.
A Sanders rival, Sen. Elizabeth Warren, D-Massachusetts, has proposed universal free college for every American and forgiveness of student loan debts in inverse proportion to income, financed by a tax on the ultrarich. So under Warren’s plan, Smith would get to contribute again, since he is No. 163 on the Forbes list of wealthiest Americans. (He’s also considered the wealthiest black person in the United States — yes, richer than Oprah.
These plans should be just part of a wider discussion on why college is so exorbitantly expensive and what to do about it. How do you provide more aid to students without encouraging colleges and universities to keep raising tuition? How does the public get the best return on its investment in young people?
Smith’s donation is inspiring, yet his munificence will rescue fewer than 400 debt-burdened students. How do we help all the graduates not lucky enough to be in the Morehouse class of 2019 who have been or will be dragging the albatross of student debt around with them for a decade or two past commencement day?
This editorial originally appeared in the Los Angeles Times.