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"When you have to pay off your debts, choices about what you can do around the world are limited," Morehouse president David A. Thomas said Sunday. "(Smith's gift) gives them the freedom to follow their dreams, their passions."
Smith's gesture, which Thomas described as a "liberation gift," will allow graduates to have more capital to do things like start businesses and support their families.
Studies show disparities in the amount of student debt accumulated by African-American borrowers compared to their white counterparts.
Millions of Americans struggling with student loans
According to recent data from the Federal Reserve, Americans owe $ 1.5 trillion in student loans. The stock of outstanding debt exceeds auto debt ($ 1.1 trillion) and credit card debt ($ 977 billion). The question of a free college has become a key topic of the 2020 campaign. Several candidates have expressed their support for students to graduate without any debt. A candidate, Senator of Massachusetts Elizabeth Warren, proposed to eliminate the debt of tens of millions of Americans and make all public colleges exempt from tuition fees in an ambitious position.
Jonathan Epps, a graduate of Morehouse, 22, said he has a $ 35,000 student loan debt. Elijah Nesly Dormeus, the first of nine children to have a university degree, said he had a $ 90,000 debt.
"It's going to flow over the years, I know that," said Epps.
African-American students incur more debt
African-American students are more likely than their peers to take out a federal student loan, as they attend public or private institutions or community colleges, according to the Center for American Progress. The Center's analysis in 2017 of data from the National Center for Education Statistics shows that over 80% of black students borrowed for their undergraduate education less than 12 years after their entry at school during the 2003-2004 school year in public and private institutions, compared with more than 60% of white and Latino students.
In community colleges, more than 60 percent of African-American students have taken out federal loans and less than 50 percent of white or Latino students have done so in the meantime, the report said.
Black borrowers have higher default rates
According to the report of the Center for American Progress, nearly half of African-American students have defaulted on a federal student loan within 12 years of entering college. Black students owed more than 100% of what they had borrowed during that period, the report says.
"On behalf of the eight generations of my family who are in this country, we are going to put some fuel on your bus," said Smith, 56, founder of the Vista Equity Partners investment company. the students of the school in Atlanta.
Eliott C. McLaughlin of CNN contributed to this report.
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