The billionaire who dished out $34 million to pay off student loans for an entire college class says America's student loan system is a 'catastrophe'
- Robert F. Smith, the billionaire software investor who spent $34 million to pay off student loans for an entire college class, called American's $1.5 trillion in student loans "atrocious" in an interview with Ford Foundation president Darren Walker.
- Smith is now building a model for other philanthropists to follow in his footsteps at other universities in a way that is "tax-efficient ... for the donors and the students," he told the Ford Foundation.
- Smith has a net worth of $6.08 billion, Business Insider previously reported.
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It's hard to pay off student debt in America - too hard, Robert F. Smith said in a recent interview with the Ford Foundation.
It's a struggle Smith is well-acquainted with: In May, the private equity billionaire pledged $34 million to pay off the student loans of Morehouse College's 400-person graduating class and their parents. On September 20, a Morehouse College representative confirmed to Business Insider that the pledge had been fulfilled.
"It's a catastrophe in the way that we are running our financial system as it relates to these young people's opportunities at a time when they have to have, in my view, more opportunity to innovate in order to compete globally," Smith said in an interview with Ford Foundation president Darren Walker published October 22.
Student-loan debt in the United States is at an all-time high. As a result of their debt, millennials are delaying markers of adulthood, like homeownership and starting a family, Business Insider's Hillary Hoffower previously reported. In fact, the average student loan debt per graduating student in 2018 who took out loans is $29,800, according to Student Loan Hero, and the national total student debt is over $1.5 trillion.
Smith called the total "atrocious."
"I thought about what I know these 400 men will do now that they no longer have this financial burden that frankly is disproportionate to other students who are graduating and typically their jobs have disproportionate relative pay to others - I know they will pay that forward," Smith told Walker.
Smith made headlines in May when he announced the gift while speaking at the Morehouse College class of 2019's commencement. In September, Smith went on to expand the gift to include any outstanding educational loans owed by the graduates' parents.
Smith is the chairman and CEO of Texas-based private-equity firm Vista Equity Partners. He has a net worth of $6.08 billion, according to the Bloomberg Billionaires Index.
"I hope a quarter of [the Morehouse Class of 2019] become politicians because I hope that quarter looks at this and says that we need to make the systemic change that you can only do at the government level, or unless you have massive amounts of capital like you control," Smith told Walker.