Education experts hope billionaire Robert F. Smith’s surprise announcement Sunday that he’ll pay the student loan debt for this spring’s graduating class at Morehouse College will be a game changer.
“I hope (Smith) starts off a trend,” former Spelman College president Beverly Tatum said Monday.
Rising student loan debt has been one of the most troubling issues in higher education, particularly for students attending historically black colleges and universities such as Morehouse, located near downtown Atlanta.
Student loan debt held by the federal government has tripled since 2007, to about $1.5 trillion, a “crisis” U.S. Education Secretary Betsy DeVos said during an address in Atlanta last year. Atlanta had the second-highest median student loan debt of any major U.S. region, about $22,000, the loan company Lending Tree reported last year. For HBCU students,the majority of whom come from families with lower-income households, student loan debt is about $27,000, according to the United Negro College Fund and other research.
Many states significantly cut higher education funding after the Great Recession a decade ago, forcing students to pay more for college.
The impact of Smith’s gift “on the lives of these graduates and their families will be incredible,” Yasmin Farahi, policy counsel for the Center for Responsible Lending, a watchdog agency, said via email. “but it’s also worth recognizing the impact it has on the lives of their family members who have co-signed on these loans or would otherwise be supporting these graduates as they worked to get out from under their student debt. Student loan debt is an intergenerational problem.”
Morehouse’s tuition for the 2018-19 school year was about $28,000, according to information on its website. About two-thirds of its students receive federal student aid, U.S. Education Department data shows. Some graduates said their student debt was as much as $100,000.
Morehouse College officials were unaware of Smith’s plans, which he described as a grant. The gift is estimated to be as much as $40 million. A Morehouse spokeswoman said Monday the college is determining how the money will be managed. More than 300 students received degrees Sunday.
“We are enough to take care of our own community. We are enough to ensure we have all the opportunities of the American Dream,” Smith, who donated $1.5 million to Morehouse for scholarships and a park on campus in January, said at the end of his 35-minute commencement speech.
Smith, a technology investor, has been generous before with his wealth, estimated at $5 billion. He gave $50 million to his alma mater, Cornell University, in 2016. Smith also donated money to buy the Queen Anne-style birth home and family home of Martin Luther King Jr. for the National Park Service.
Qualon Bobbitt, 22, a Lithonia resident who graduated Sunday, had about $17,000 in debt, his mother said. Bobbitt was scheduled to graduate in 2018, but had to stay an extra year to take an international economics class because he didn’t meet the grade requirement, a C. Bobbitt had a C-.
“I was heartbroken,” Bobbitt said.
Bobbitt took the class again in January and got a B+. Bobbitt said he wasn’t sure he heard Smith’s announcement correctly until classmates began celebrating.
“He graduated cum laude and debt free,” said Bobbitt’s mother, Chinita Davis.
Experts interviewed Monday said they were unaware of a similar contribution to help pay student loan debt. Opinions are mixed concerning whether it’s more beneficial to offer scholarship money or help repay loan debt. Tatum noted some students make their decisions about which school to attend based on knowing how much financialaid they’ll receive.
Many HBCUs have trouble offering scholarships. In 2017, giving to all American colleges and universities, was an estimated $43.6 billion, according to an annual study by the Council for Advancement and Support of Education. By contrast, private giving to HBCUs for the most recent year available was $320.6 million, according to federal data.
“I’m hoping the philanthropic community says ‘Hey, I think it’s time to take this up a notch or two to give more to HBCUs,” said DeShawn Preston, a UNCF research associate.
Enrollment at HBCUs rose from just over 292,000 in fall 2016 to about 298,000 in fall 2017, according to the most recent federal data. It’s the first year since 2010 the federal government has reported an increase in enrollment. Federal enrollment statistics are typically two years behind.
Preston attributes the increase to celebrities like Beyonce spotlighting the schools and its students using social media to showcase their value.
Tatum hopes Smith’s gift will encourage other philanthropists to give more and that the attention it’s received will increase interest in HBCUs.
“I’m sure it will have a ripple effect that these are institutions worth investing in and the students are worth investing in,” Tatum said.