An American billionaire and philanthropist stunned graduating students of Morehouse College on Sunday (local time), pledging to pay off the student debt for every 2019 graduate in his commencement speech.
The benefactor, Robert F. Smith, is the CEO and Chairperson of Vista Equity Partners. His pledge to pay off the debt will provide a significant foundation for the approximately 430 students, helping to establish their careers and kickoff their lives as young professionals.
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Morehouse College is a historically African-American, all-male university in the US city of Atlanta, Georgia.
The total debt of the Class of 2019 comes to an estimated US$40 million (NZ$61.2 million).
"On behalf of the eight generations of my family who have been in this country, we're gonna put a little fuel in your bus," Smith said to the graduating class.
"... This is my class, 2019. And my family is making a grant to eliminate their student loans."
Students erupted in cheered and rejoiced after Smith's declaration. Morehouse College staff, faculty and administrators were in apparent shock.
According to studies and existing data, Smith's generosity will make a fundamental difference in the students' futures by helping combat wealth disparity.
The Daily Mail reports that 15 years after graduation, black adults are 185 percent more indebted due to student loans compared to white adults.
This is largely due to a disparity in repayment rates. Black graduates pay off their loans at an average rate of 4 percent a year, while white graduates pay their loans at an average annual rate of 10 percent.
Smith and actress Angela Bassett received honorary degrees from Morehouse at Sunday's graduation.
Smith has already promised a gift of $1.5 million to the college.
Morehouse College president David A. Thomas said in an interview: "Many of my students are interested in going into teaching, for example, but leave with an amount of student debt that makes that untenable.
"In some ways, it was a liberation gift for these young men that just opened up their choices."