Billionaires are not the solution to overwhelming student debt

Philanthropy is laudable, but systemic change is needed to tackle $1.5 trillion of college debt

Robert F. Smith, a billionaire tech investor, the founder and CEO of Vista Equity Partners and the richest black man in America, announced during the commencement address at Morehouse College this past Sunday that he would pay off the student loans of the college’s entire graduating class of 2019. A video of the speech shows the almost 400 students of the historically black men’s college — with debts ranging from $17,000 to $200,000 — erupt into celebration after the shock of Smith’s statement wore off.

Smith’s generous gift — pouring a portion of his wealth into freeing hundreds of young men from the immense burden of student debt — is undeniably laudable and inspiring. This action will profoundly affect the Morehouse graduates for the rest of their lives, allowing them to pursue a future career or further education without thousands of dollars of loans hanging over their heads.

But regardless of Smith’s generosity, personal and large-scale philanthropy should never be a substitute for fixing the egregious failure of the American higher education system that burdens tens of millions of students. Student debt in the U.S. has nearly tripled since 2007, reaching a staggering $1.5 trillion this year. The average 2017 graduate of a four-year college finished with $28,650 of debt. At the UCs alone, students pay more than six times the amount of tuition than in 1979–80 when adjusted for inflation.

The student debt crisis has particularly targeted people of color, both nationally and in California, with historically black colleges like Morehouse being hit the hardest. Ironically (or perhaps intentionally), nothing shows this more clearly than Smith’s gift, which is expected to be as much as $40 million — for a mere 396 students. Black graduates of four-year colleges owe an average of $7,400 more in student debt than their white counterparts. Students of color at the UCs are three times more likely to accumulate student debt than are their white peers.

College graduates should not be forced to move on from higher education, which they’re told is essential to make a decent living, with thousands of dollars of debt that might take decades to pay off. The gracious act of one billionaire — or even a dozen billionaires — does not make up for the injustice of America’s student debt crisis. Whether a student will be dragged down by debt should not be determined by their commencement speaker, and being able to walk away from college debt-free shouldn’t feel as unlikely as winning the lottery.

“I know my class will make sure they pay this forward,” Smith said at the end of his announcement. “Let’s make sure every class has the same opportunity going forward.”

The ideal world is a generous world, where each generation looks out for the next. But a string of donations is no replacement for effective public policies that would allocate more funding to higher education and end the predatory student loan system, which saddles students with debt that cannot be escaped even by declaring bankruptcy. This kind of large donation is ultimately just a Band-Aid attempting to alleviate an issue in the short-term and does little to actually eliminate the student debt crisis at its roots.

It’s unacceptable that the cost of higher education in America might also mean a life of debt. In addition to Smith asking this generation of graduates to “pay it forward” with generosity and empathy, the Editorial Board asks for tangible solutions to fixing a broken system that steeps millions of Americans in a trillion dollars of debt.

Written by: The Editorial Board