A billionaire technology investor and philanthropist says he will provide grants to wipe out the student debt of the entire graduating class at Morehouse College – an estimated $40 million. (May 19)
Detroiter Kristopher Mathis was looking at roughly $57,000 in student loan debt before commencement exercises kicked off May 19 at Morehouse College in Atlanta.
And then suddenly, after one startling promise in the commencement speech, that college debt appeared to vanish. Debt that could have taken many graduates — and their families — decades to pay off was apparently gone for the 396 young men in the class at the historically black college.
“It’s really shocking that I’m starting with a clean slate,” said Mathis, 21, who graduated from University of Detroit Jesuit High School in 2015, “and that I don’t have any student debt, which is really terrorizing my peers across the country.”
Much of America remains in shock after African American billionaire Robert F. Smith told the all-male Morehouse Class of 2019 that he and his family would pay off the student loans for the entire class.
That special 2019 graduating class includes 11 students from Michigan altogether, one from Detroit, according to Morehouse’s records.
The inspiring gift was estimated to be worth anywhere from $10 million to nearly $40 million, depending on what’s actually covered.
Just what is covered, though, remained a mystery for families days after the commencement address. Would tens of thousands of dollars taken out by individual families under the Parent PLUS student loan program be covered too? Mom and dads are hoping that’s the case.
It isn’t a small point, given that 70% of the student loans that Mathis has were taken out by his parents under the Parent PLUS program. Many families at Morehouse rely on the federal government loans for parents to cover what can be a large gap left after students hit the limit on their own federal student loans, scholarships and savings.
Even so, no one expected to contemplate anything like this on that hot Atlanta Sunday. Smith caught everyone by surprise.
Was that for real?
“Did he just say that?” recalled Joshua Adkins, 21, as he described the reaction of his fellow classmates at the Morehouse graduation ceremony.
Adkins, who grew up in West Bloomfield and graduated from Detroit Country Day in 2015, soon found himself interviewed by CNN about the wild graduation day experience.
Adkins never had any student loans. He didn’t tell his friends that he didn’t have any debt, though, knowing some good fortune shouldn’t be shared too easily.
His father Michael Adkins, who is now retired, was a vice president at the Chubb Corp. His mother Sandy Adkins worked in real estate.
“My parents have been saving a lot and they had the opportunity to pay for it. I was very blessed,” Adkins said.
Adkins — who achieved the rank of Eagle Scout in the Boy Scouts of America — had received some smaller scholarships to help cover college costs, too.
Even so, Adkins was thrilled about the news for his friends, who had owed anywhere from $30,000 to $150,000 in student loans at graduation.
Based on 2017 data, the average debt for graduates from the private, historically black, all-male Morehouse College then was $31,833 in 2017, with 80% of graduates carrying student loan debt, according to the Project on Student Debt published by the Institute for College Access & Success. (Those figures do not include loans borrowed by parents under the federal Parent PLUS program.)
Adkins, who majored in finance with a minor in Spanish, said he knows plenty of students who obtained finance degrees because they wanted jobs that could help them pay off student loans.
“It’s now a weight lifted off their shoulders,” said Adkins, who will start work at the global consulting firm Accenture in Atlanta in September.
More options for grads
Who knows, maybe a graduate now can afford to take a risk on a dream job? Or a few may have more flexibility to leave a job that ends up being a bad fit? Or maybe move to a different city?
Adkins also took heart in Smith’s speech.
Adkins said the billionaire’s message was clear: “We are enough to lift each other up, and when he said ‘we’ he meant the entire African-American community.”
‘Couldn’t believe it’
Mathis said Smith surprised everyone.
“He kind of said that out of the blue.”
Seconds after the remarks were made, Mathis said his mother immediately texted him and told him to be certain to thank Smith on the spot when Mathis received his diploma. He did just that and others did the same.
Many students in the crowd shouted MVP — most valuable player or philanthropist.
“My first thought was this is amazing,” said Printess Mathis, Kristopher’s mother who was in Atlanta for the graduation with other family members.
“We could not believe it,” she said.
She said the family wanted Kristopher to go to Morehouse and knew that sacrifices would need to be made.
“A lot of times parents really don’t realize how much a toll it takes on the family,” she said.
But her son worked hard at getting good grades, getting involved in outside activities and improving his chances for scholarships while he was in college, she said.
Scholarships exist: Oprah Winfrey, for example, began supporting Morehouse students in 1989 with a $1 million contribution made during commencement exercises that established the Oprah Winfrey Endowed Scholarship Fund. Winfrey’s total gift stands at $12 million, according to the Morehouse site.
Mathis said he learned that he had to network to build relationships with professors at the school and others to get a better grasp on the opportunities for scholarships.
All that helped put a lid on the debt.
Graduating cum laude
Frankly, Mathis felt fortunate that he was looking at only $57,000 in student loan debt, nothing close to the six figures that others have, before the commencement speech began last Sunday.
Mathis — who was graduated cum laude with a bachelor of arts degree in business administration with a concentration in marketing and a minor in sales — has a job with a “great salary” as an account executive lined up in Chicago at Amazon. He starts in July.
His father, Derrick Mathis, works at UPS. His mother has a job as well. The family lives in East English Village in Detroit.
“I didn’t grow up impoverished,” he said, describing his family as middle class. “My parents worked — literally worked — very hard to get me everything I needed. My dad was constantly working.”
Mathis and his mother said they’re both hopeful that Smith’s promise will pay the student loans that his parents took on, too. His mother said Tuesday that the family had not yet received any specifics on how the loans will be paid or what will be covered.
But the family is thankful.
“I’m really grateful that Mr. Smith made the remarks that he did,” he said.
“He understands that student loan debt in America is really setting students back at the start of their journey,” he said.
“He’s really changing lives for the future — generationally changing lives. It’s amazing what he did.”
Mathis knows some students and their families who easily owe well into six-figures in student loans.
“There are a lot of brothers who graduated with me who are in way different circumstances than I am.”
Morehouse College provided this statement: “We, at Morehouse College, would like to thank Vista Equity Partners founder, Chairman & CEO Robert F. Smith, our honorary alumnus, for the surprise gift that he offered to the graduating class at Morehouse’s 135th Commencement ceremony.”
“To be free from the financial burden of paying off student loans will be life-changing for the Class of 2019,” the statement said.
“Our Office of Business and Finance, as well as our Office of Enrollment Management, have been working diligently to calculate the student loan debt and other details of this gift. As soon as we have a final figure, we will share it with our new graduates so that they can continue on the path to careers and top-tier graduate schools student loan debt free.”
$1.46 trillion outstanding
The big-picture scary numbers surrounding the student debt crisis have been well reported.
Outstanding student loan debt nationwide stood at $1.46 trillion in the fourth quarter of 2018, according to a report by the Federal Reserve Bank of New York.
Those ages 18 to 29 had the most college debt — more than $1 trillion.
About 65% of college seniors who graduated from public and private nonprofit colleges in 2017 had student loan debt, according to the Project on Student Debt. Borrowers owed an average of $28,650, roughly 1% higher than the 2016 average. Updated figures will be released later this year. (Those figures do not include loans borrowed by parents under the federal Parent PLUS program.)
Parents of Morehouse grads tend to take on a good deal of student loan debt, too.
Mathis said his parents didn’t try to take out more in loans in the sophomore year too because it didn’t seem realistic.
So Mathis said at times he wasn’t even sure if he’d make it back to Morehouse for a second year. He worked to obtain scholarships and other money.
But it wasn’t enough.
He remembers sitting at the financial aid offices during the week before you could drop classes that sophomore year. He wasn’t sure if he was staying or going.
“I was really sad. I was fed up,” he said.
But someone in the academic affairs office took notice and helped him get more financial aid to cover the rest of the balance.
Mathis knows that he could have chosen a less expensive college. He said he was accepted to Michigan State University, Central Michigan University, Howard University, Hampton University, as well as Morehouse. Morehouse has a sticker price of around $49,000 a year for tuition, room and board and other costs, according to the web site College Simply.
Yet Mathis said he was impressed with Morehouse when he visited Atlanta on a college tour with the mentor group, the Midnight Golf Program, a nonprofit based in Bingham Farms.
Mathis said he watched other UDJ grads who went to Morehouse before him develop into strong young men.
So he felt he was destined to go to Morehouse to “grow as a man, especially as a black man.”
“It’s not necessarily the most financially responsible decision to make,” Mathis said. “A lot of people do take that leap of faith.”
“It’s been a very challenging journey but it’s really good to see the blessings that are unfolding before me,” he said.
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