Billionaire Created a Perfect Experiment by Erasing $34 Million in Student Debt
(Bloomberg) -- The two young men started at the same college, on the same day, and financed their education the same way: by going deep into debt.
Today, Elie Kirkland is so financially secure that, at age 24, he's thinking of buying a home. Richard Williams, also 24, is in such a hole that he deferred his dreams of becoming a doctor.
Their stories reflect a remarkable sequence of events at Morehouse College, a historically black men's school in Atlanta. The Morehouse Class of 2019 hit the American college equivalent of the lottery: Billionaire Robert F. Smith surprised its members at graduation with an extraordinary pledge to pay off their student debt.
It was only a quirk of bureaucracy that kept Kirkland in the money. He was supposed to graduate, like Williams, in 2018. But because of financial aid complications, Kirkland delayed graduation by a year and landed in the class that received Smith's gift.
“If I want to buy a house, I can buy a house. If I want to take out a loan to start a business, I can do that,” said Kirkland, who had been more than $30,000 in debt. “It's a huge burden that I just don't have to worry about.”
The gift was a reminder of both the country's vast wealth gap as well as the magnitude of the student-debt crisis. It cost Smith less than 1% of his net worth, which is estimated to be about $6 billion. And it was a drop in the bucket of U.S. student loan debt, which stood at nearly $1.7 trillion in March, according to the Federal Reserve. Smith declined to be interviewed for this story.