Billionaire Robert F. Smith To Launch Alternative Student Loan Program For HBCUs To Help Close Racial Wealth Gap

Billionaire Robert F. Smith To Launch Alternative Student Loan Program For HBCUs To Help Close Racial Wealth Gap

student loan
Robert F. Smith seen during a live recording of Reid Hoffman’s hit podcast “Masters of Scale” on day three of Summit LA19 in Downtown Los Angeles on Sunday, Nov. 11, 2019, in Los Angeles. (Photo by Amy Harris/Invision/AP)

When it comes to student loan debt at Historically Black Colleges and Universities (HBCUs), billionaire Robert F. Smith is putting his money where his mouth is.

After wiping out the entire student loan debt of Morehouse College’s 2019 graduating class and developing a Science, Technology, Engineering, the Arts and Math (STEAM) academy in Denver which models HBCU principles, Smith is now set to establish an alternative student loan program for HBCU students with the goal of helping mitigate the racial wealth gap.

“You think about these students graduating and then plowing so much of their wealth opportunity into supporting this student debt, that’s a travesty in and of itself,” Robert F. Smith told TIME in June 2020, referencing the 65 percent of Black wealth that is consumed by student loan debt.

Entitled the Student Freedom Initiative (SFI), the student loan program will begin in Fall 2021 and offer funding to juniors and seniors in STEM majors, reported HBCU Connect.

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It will offer HBCU graduates repayment plans that are “manageable and scalable with their income after graduation,” the SFI website states.

“Each year, thousands of Black graduates from HBCUs across America enter the workforce with a crushing debt burden that stunts future decisions and prevents opportunities and choices,” the billionaire Robert F. Smith said in a statement. “By addressing the financial stress of college and providing students with resources and community, we can finally broaden the talent pipeline and create a more diverse and thriving economy.”

Thus far, partner schools include: Claflin University, Clark Atlanta University, Florida A&M University, Hampton University, Morehouse College, Prairie View A&M University, Tougaloo College, Tuskegee University and Xavier University.

According to TIME, aims to reach 5,000 students each year with an average loan of $32,000. Smith himself wants people to follow his example to ease the burden of education on Black students.

“I think it’s important that we do these things at scale and en masse because that’s how you lift up entire communities,” Smith said. “Of course, we all like the great one story, but I want thousands of these stories. And I want thousands of Robert Smiths out there who are actually looking to do some things in fields that are exciting to them and are giving back.”