A billionaire tells Morehouse seniors that he will pay off their student loan

This is a moment that the 45 million Americans who hold a student loan can only dream.

Robert F. Smith, founder and CEO of private equity firm Vista Equity Partners, came to Morehouse College to deliver an opening speech and receive an honorary degree – the standard element of any graduation ceremony. 39, a college.

But what the billionaire investor then surprised surprised even his own staff and that of Morehouse College, according to The Atlanta Journal-Constitution.

Smith announced that he and his family would set up a grant to pay off some 400 senior-aged student loans. The total donation is estimated at $ 40 million, according to AJJ.

Smith had already pledged a $ 1.5 million donation to Morehouse, a historically black college located in Atlanta. According to Forbes, Smith has a net worth of $ 5 billion.

The burden of student loans for older graduates is increasing. Today, the average debt at the end of studies is about $ 30,000, triple what it was in the early 1990s.

And many graduates simply can not afford to pay – 3,000 borrowers default each day.

With a total debt of $ 1.5 trillion across the country, politicians are mobilizing to solve the problem. Senator Elizabeth Warren, Democratic presidential candidate of 2020, proposed to eliminate the $ 50,000 debt of people whose family income is less than $ 100,000.

Representative Alexandria Ocasio-Cortez spoke to Twitter to comment on Smith's gift. She said the promotion of Morehouse in 2019 would become a "natural experience" – students could be followed to compare the evolution of their lives compared to their peers who have debts with a degree.

But Ocasio-Cortez also said: "People should not be in a situation where they depend on the enormous act of charity of a stranger".

– Annie Nova from CNBC contributed to this report