Close to 51% of Black students use the student loan borrowing process to pay for their college education. According to findings from a 2023 Education Data Initiative report, Black college graduates owe on average 188% more in student loan debt than their white counterparts four years after graduation. The same report states that more than half of Black student borrowers have less wealth than the amount they owe in student debt. Additionally, student loan debt for Black borrowers makes up approximately 13-23% of the racial wealth gap for Black American adults ages 25-30 with some college education or more.
During the 2019 Morehouse College graduation ceremony, philanthropist, entrepreneur and dealmaker Robert F. Smith sought to correct the student loan burden felt by many Black Americans. He delivered a commencement speech that would change the lives of the graduates sitting before him by presenting them with a gift that would liberate their spirits and contribute to their successes for years to come. In his speech, Smith pledged to pay off the student loan debt they accrued during their tenures at Morehouse College. Smith later expanded this gift to include the student debt held on their behalf by their guardians — a gift that totaled $34 million.
By relieving the financial burden of student loan debt for almost 400 Morehouse College graduates and the debt taken on by their loved ones, Smith helped equip the graduates with the means to pursue business and financial opportunities that they might not have if they had continued to hold student debt. His donation is a driving force toward creating generational wealth and assisting in closing the racial wealth gap.
During his commencement speech, Smith emphasized the importance of paying it forward. Because of Smith’s generous donation pledge, these Morehouse College graduates have the chance to do so in their communities. Below, we learn more about their stories, how some students are paying forward and how Smith continues to help college students.
An Investment Toward the Community and Future
Aaron Mitchom and Ernest Holmes are two alumni who benefitted from Smith’s gift. These Morehouse College graduates are embarking on transformational pursuits in their respective industries that will positively affect their communities and pay forward the gift they received.
Mitchom, who obtained a finance degree from Morehouse College, previously worked in banking before switching to tech. With Mitchom’s $200,000 student loan debt erased, he is launching a new tech startup, Freedom, which will use artificial intelligence to make personal loans for bail bonds.
Holmes, a software engineer at Google, is making waves in the tech sector as co-founder of the nonprofit organization, Code House. Code House offers youth from underrepresented communities the opportunity to connect with technology and is working to help close the diversity gap in the tech industry. The organization provides $20,000 scholarship funds to freshman students interested in science who attend Historically Black Colleges and Universities (HBCUs).
Like Mitchom and Holmes, rather than worry about student loan debt, the rest of the Morehouse College class of 2019 can invest, pursue higher education endeavors, buy homes and start businesses.
Student Success Program
Smith’s donation was also a catalyst for the creation of the Student Success Program, established by the Morehouse Board of Trustees. This program is a funding initiative that helps eliminate financial barriers and burdens for Morehouse College students and their families. Additionally, the Student Success Program serves as a fundraising and research initiative that compares the hindrances of student loan debt to the financial freedom of no student loan debt for Morehouse College alumni.
Robert F. Smith and Student Freedom Initiative
Student Freedom Initiative (SFI), an income-contingent education funding alternative for STEM-majoring students attending HBCUs and other Minority Serving Institutions, was inspired by Smith’s pledge. SFI was formed through a partnership between Smith, business and educational professionals. Smith and Fund II Foundation, of which Smith is the founding director and President, each contributed $50 million to propel SFI into the future of college education funding. Smith now serves as Chairman of the Initiative.
Launched in 2021, it is a flexible, sustainable solution for college affordability and redefines the way Black students pay for higher education via the Student Freedom Agreement. The Student Freedom Agreement allows students to make payments based on their earnings once they graduate college.
SFI helps resolve the ongoing issue of student loan debt for Black college students attending HBCUs. It addresses historic inequalities that Black college students face and helps increase Black economic mobility by preparing students for success in STEM careers.
The program is guided by its core values of being student-centered, holistic, evidence-based and collaborative. SFI also provides opportunities for hands-on professional and life training, technology enhancement and integrated student services, such as tutoring and mentorship. Students are also provided access to internships through Fund II Foundation’s internXL program.
Learn more about Smith and his many initiatives and passions by following him on LinkedIn and subscribing to his YouTube channel.
