GAME CHANGER: ROBERT SMITH’S GIFT TO MOREHOUSE COLLEGE

GAME CHANGER: ROBERT SMITH’S GIFT TO MOREHOUSE COLLEGE BY KEITH HARRISTON

Morehouse College officials thought for months about how to best make billionaire Robert F. Smith’s donation to pay off student loans accrued by members of the school’s Class of 2019 have impact beyond the graduating class that Smith “adopted.”

The answer, according to Morehouse President David A. Thomas, is the Morehouse Student Success Program.

Established by the Morehouse Board of Trustees, the Student Success Program will be the funnel through which Smith’s $34 million donation is distributed to pay off the full loan balances— principal and interest—as of Aug. 28, 2019 of students and their parents or guardians. The loan amounts must be verified by the U.S. Department of Education. Federal loans, both subsidized and unsubsidized, Georgia Student Access Loans, Perkins Loans, Parent Plus Loans and some private student loans processed by Morehouse will be eligible to be paid.

In all, the pay offs will impact loans taken out by more than 400 students and their parents or guardians from the Class of 2019. Morehouse alumni who graduated in May 2019 or who finished their degree requirements during summer school 2019—and their parents or guardians—are eligible to participate in the inaugural offering from the Morehouse College Student Success Program. In addition, they must show supporting documents to prove that loans were taken out to finance a Morehouse College education. Their loans also had to be processed by Morehouse.

“It was really all driven by Robert,” Thomas said. [He] took his time to dig in and understand not just student debt but also family debt.”

A majority of the $34 million gift from Smith will go toward loans taken out by parents or guardians of members of the Class of 2019, a Morehouse spokesperson said.

“We arrived at the $34 million figure by working with the U.S. Department of Education and reconciling their numbers with the loans that we have booked through our financial aid office,” Thomas said.

In addition, $400,000 of the $34 million will fund Morehouse research that studies the impact on the lives and careers of the members of the Class of 2019 whose student loans are paid in full or reduced to manageable levels, according to the school.

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The first subjects of the research study will be some of the inaugural gift recipients who will be encouraged to participate in the study, Thomas said. The study’s results could be used to

help make the case for further large donations to the Morehouse Student Success Program.

Under the program, Morehouse will solicit and accept donations made specifically to reduce or eliminate the student loan debt of future graduates and their parents or guardians.

Smith, founder, chair and CEO of Vista Equity Partners, made the gift to Morehouse during his speech at the school’s commencement in May 2019, where he received an honorary doctorate. The act surprised not only Morehouse students but also the administration. Smith’s “grant,” as he called it, focused attention and discussion on student loan debt, the role of philanthropists in higher education and in alumni relationships with their alma maters, especially historically black colleges and universities like Morehouse.

Part of the discussion was driven by Smith’s words. He challenged the Morehouse graduates to “make sure [to] pay this forward.” And to alumni, Smith said: “This is a challenge to you…. Let’s make sure every class has the same opportunity going forward. Because we are enough to take care of our own community.”

Student loan debt in the United States is at $1.5 trillion, according to the U.S. Department of Education. At Morehouse, 85 percent of students take out loans to pay for their education. The student loan debt threshold at graduation is between $35,000 and $40,000, according to the college, which is higher than the average for other historically black colleges and universities.

The United Negro College Fund reports that HBCU graduates borrow almost twice as much to pay for college—$26,266 on average—than non-HBCU students. And one in four HBCU students borrows $40,000 or more to attend college.

“Morehouse’s program to provide debt relief to new graduates is a fund-raising opportunity that should be studied and

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duplicated nationally,” Michael L. Lomax, president and CEO of the UNCF, said in a statement. “The impact of such a gift, particularly for minority or economically disadvantaged families,

could accelerate the growth of a more diverse and robust middle class.”

Morehouse’s president said that after commencement the school had inquiries from a number of individuals about how they could participate. “That did get us thinking about how we could create a vehicle for people who want to contribute,” he said. Some inquiries have been made, he said, about “helping defray the debt of students going into low-pay, high-value occupations like education. That led us to create this Student Success Program. This would allow us to customize ways that individuals can support the program.”

While there has yet to be commitments for large donations, Thomas said, the college “is in significant discussions with [potential donors], some of them in the eight-figures range.”

“This liberation gift from Robert Smith will be life-changing for our new Morehouse Men and their families,” Thomas said. “It is our hope that our graduates will use their newfound financial freedom to pursue their career goals, to lead and serve the community and to remember the spirit of the gift given to them by paying it forward to support the education of future classes of Morehouse Men.”