For graduates at Morehouse College, a historically black college, it was all good news when tycoon Robert Smith said that he would write off their student debt. It was a euphoric moment for the students. And this was also a victory for the black community in the United States.
Billionaire investor Robert F. Smith made a pledge to wipe out the students' debt,much to the delight of the students, and their parents too.
"On behalf of the eight generations of my family who have been in this country, we're going to put a little fuel in your bus," he told the students during his commencement speech. When he said that, he also went on to say that his family was preparing a grant that would clear off the debts of these students.
"Now, I know my class will make sure they pay this forward," he continued. "I want my class to look at these (alumni) - these beautiful Morehouse brothers - and 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."
This surprise gift is not the first time that Robert Smith has been of help to Morehouse College. He has worked with the college these past years, donating $1.5m towards scholarships and development at the institution.
Although the exact amount for about 400 students to be covered has not yet been arrived at, it is estimated that the total amount could get up to $40 million.
A "liberation gift"
It is said that the cost of university education in the United States has risen 3 times faster than other school-related expenses. With these rising costs,students continue to take student loans in the hope that they will be repaid by higher earnings as they get into the job market.
But a student loan is a millstone around the neck. The total amount of debt arising from student loans is $1.53 trillion. The standard period of repaying federal loans is 10 years, but research suggests that it takes 4-year degree holders an average of 19.7 years to repay these loans.
When one looks at these figures, and looks at what Robert Smith has done, it is justified to call this a "liberation gift."
CNBC reported, "Around 80% of students at Morehouse College have loans, and the average debt of graduates in 2017 was $31,833. Three years after leaving the college, less than a third of Morehouse students have begun to repay the principal on their debt, or the amount they borrowed before interest accumulated."
This liberation means that they will have more options to explore and will not be hamstrung by the need to repay these loans.
On the overall, African-American students suffer more from student debt than their white counterparts. With student debt, there is little financial and economi freedom to gain and enjoy. This is because much of what you are getting is paying off the debts, and you are just surviving to pay the bills. The likelihood of even starting your own business is significantly reduced.
The students were really overjoyed with this. And gratitude is all they could express.
"We're looking at each other like, 'Is he being serious?' That's a lot of money," Robert James (21) said.
"It'll sink in as the years go on. I know that for a fact. I still don't really have words... It makes a great day just that much better," Jonathan Epps (22) said.
This speaks volumes of the magnitude of Robert Smith's gesture. Very heart-warming.
The fight in other parts of the world
Over the past years, South Africa has made headlines because of the Fees Must Fall movement. This was a student-led protest that started around October 2015 against the increase in university tuition fees. It started at University of Witwatersrand before spreading to other universities across the country.
The governemnt said there would be no increase of tuition fees in 2016, but changed this when they said there was an 8% increase for 2017. They then said each university had the discretion to choose how much their tuition would increase.
What the protests ultimately led to was the creation of a national bursary scheme for poor and working class students totalling R12.4-billion in 2018.
In December last year, the Vice-Chancellor of the University of Cape Town, Prof. Kgethi Phakeng, paid off the debts of students who were unable to graduate. She used the money that was meant for her inauguration as the new vice-chancellor.
In October 2018, Liberian president George Weah declared university education to be free.
Header image credit - International Business Times