Robert F. Smith is the founder, chairman and CEO of a private equity firm called Vista Equity Partners.
Robert F. Smith. Credit: PA
While giving the commencement address at Morehouse College in Atlanta, which has a large African-American community, he announced he would be paying off the debts of students, urging them to learn from the actions of 'positive role models'.
"On behalf of the eight generations of my family that have been in this country, we're gonna put a little fuel in your bus," he told the students.
"This is my class, 2019. And my family is making a grant to eliminate their student loans."
During his speech on Sunday 19 May, Smith referenced Martin Luther King, Jr. and told the graduating class how it's important for African Americans to 'acquire the tech skills and be the beneficiaries in sectors that are being automated'.
"You are responsible for building strong, safe places where our young brothers and sisters can grow with confidence," he continued.
"Watch and learn from positive role models, and believe that, they too, are entitled to the American Dream."
Students reacting to Smith's shock announcement. Credit: PA
Smith's generous gift is thought to amount to around $40 million.
According to the Associated Press, Smith had also already pledged $1.5 million to the college.
Many of the 400 or so graduating seniors leapt to their feet after Smith broke the news in total shock.
A spokesperson for Smith told BuzzFeed that the businessman was 'thrilled to invest in these young people and their future'.
Aaron Mitchom, a graduating student at Morehouse, told the Associated Press that he had previously drawn up a spreadsheet to calculate how long it would take him to pay off his $200,000 student debt - having come up with the concerning timescale of 25 years.
"I can delete that spreadsheet," he said.
"I don't have to live off of peanut butter and jelly sandwiches. I was shocked. My heart dropped. We all cried. In the moment it was like a burden had been taken off."
Tonga Releford, the mother of graduating Morehouse senior Charles Releford III, told the Atlanta Journal Constitution that her son's student loans amounted to around $70,000.
"I feel like it's Mother's Day all over again," she said.
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