This US billionaire just promised to pay the student loans of an entire graduating class


"In some ways, it was a liberation gift for these young men that just opened up their choices."

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A billionaire tech investor has shocked an entire graduating class in the United States, by promising to pay off all their student loans, at a cost of about $US 40 million ($58 million).

Robert F. Smith made the announcement during his commencement speech at Morehouse College in Atlanta, Georgia.

Student debt in the US amounts to $US 1.52 trillion as of June last year, according to Forbes. The average student debt is close to $US 40,000. It is estimated that more than 44 million people owe student debt in the US.

Smith is the founder and CEO of Vista Equity Partners, a private equity firm that invests in software, data, and technology-driven companies.

He said he hoped "every class has the same opportunity going forward".

"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," the investor and philanthropist told graduates in his morning address on Sunday.

This is my class, 2019. And my family is making a grant to eliminate their student loans.

Mr Smith said he expected the recipients to "pay it forward".

"Because we are enough to take care of our own community," Smith said.

"We are enough to ensure that we have all the opportunities of the American dream. And we will show it to each other through our actions and through our words and through our deeds."

In the weeks before graduating from Morehouse on Sunday, 22-year-old finance major Aaron Mitchom drew up a spreadsheet to calculate how long it would take him to pay back his $US 200,000 in student loans - 25 years at half his monthly salary, per his calculations.

In an instant, that number vanished. Mitchom, sitting in the crowd, wept.

His mother, Tina Mitchom, was also shocked. Eight family members, including Mitchom's 76-year-old grandmother, took turns over four years co-signing on the loans that got him across the finish line.

"It takes a village," she said. "It now means he can start paying it forward and start closing this gap a lot sooner, giving back to the college and thinking about a succession plan" for his younger siblings.

Morehouse College President David A. Thomas said the gift would have a profound effect on the students' futures.

"Many of my students are interested in going into teaching, for example, but leave with an amount of student debt that makes that untenable," Thomas said.

"In some ways, it was a liberation gift for these young men that just opened up their choices."