In 2019, philanthropist and Entrepreneur, Robert F. Smith paid the student loan debts of the Morehouse Collegegraduating class. He surprised the class with the news during his commencement address at the college that year, and told the graduates to use this opportunity of graduating debt free to pay it forward and uplift their community.
“We are enough to take care of our own community. We are enough to ensure we have all the opportunities of the American dream. We will show it to each other through our actions, and through our words, and through our deeds,” Smith said after stunning students, parents and faculty with the announcement.
One of the 2019 Morehouse College graduates who benefited from Smith’s gift is Carlos Outten, a first-generation Bahamian-American based in Atlanta, Georgia, who earned his bachelor’s degree in Theater in 2019 and was able to get his student loan debt erased with Smith’s gift. In December 2021, Outten wrote an op-ed titled, “The Loans That Steal Dreams,” where he expressed his gratitude for Smith’s contribution that allowed him to leave college debt free. But Outten recognizes that this is a luxury most graduates don’t have, especially minority graduates. He explains how the student debt crisis greatly contributes to educational inequities and the racial wealth gap.
“I’ve done so much more than I would have been able to if I had student debt. I was even able to purchase my first home. Sadly, that is not an option for many college graduates, particularly Black graduates. And this isn’t just about having a place to live. Deferring homeownership often deepens the wealth gap in America because owning a home is a key way to build wealth,” says Outten in his op-ed. Additionally, U.S. Census data found that Black Americans have the lowest homeownership rates in the nation at 43.1%, compared to white Americans with the highest rate at 74.4%.
The racial wealth gap has been fueled by centuries of injustice and lack of opportunities. Now, many families of color are “at the bottom of the ladder in terms of overall wealth,” which makes it more difficult to build wealth. According to 2016 Brookings research, the average white American family holds approximately 10 times more wealth than the average Black American family. The average net worth of Black families in America was only $17,150 in 2016, compared to $171,000 for white families.
The student loan debt crisis makes it more difficult for families of color to catch up:
- Harvard Business Review states that “student debt is the biggest contributor to the financial burden of the adult population.”
- Federal Reserve Economic data finds that about 44 million Americans hold approximately $1.7 trillion in student debt, and Black students and graduates carry a large sum of this load.
- Brookings data had found “Black college graduates are almost twice as likely as white graduates to accumulate graduate school debt.”
Smith is continuing to work toward solutions to help ease the burden of student loan debt for today’s students and graduates. One of the ways he does this is by working with organizations like Student Freedom Initiative, a nonprofit that provides “a catalyst for freedom in professional and life choices for students attending Minority Serving Institutions.” In 2020, Smith made a $50 million donation to help launch the program, and today Student Freedom Initiative is working with more than 20 HBCUs to help build their capacity and help their students finance a brighter future.
Read more from individuals whose lives have been positively impacted by Robert F. Smith’s gift to Morehouse College graduates in 2019.