Robert F. Smith, the chairman and CEO of Vista Equity Partners, is continuing his philanthropic support of Historically Black Colleges and Universities (HBCUs) with a $50 million donation to the Student Freedom Initiative.
The Student Freedom Initiative is a charity that helps students at Minority Serving Institutions circumvent student debt and loans. The initiative offers students an income-contingent alternative to the high cost and high debt of taking out loans. The initiative also offers paid internships as well as studying and tutoring options.
“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,” Smith said, according to Yahoo Finance. “A college education should empower and prepare our next generation for a limitless future. The Student Freedom Initiative is a culmination of work that followed my gift to the Morehouse College Class of 2019. The $1.6 trillion student debt crisis in our country is a human rights crisis. The Initiative is purposefully built to redress historic economic and social inequities and to offer a sustainable, scalable platform to invest in the education of future Black leaders.”
Smith, who is also the board chair of the Student Freedom Initiative believes people should be financially free after leaving college to pursue their dreams. Instead many college students graduate already thousands of dollars in the hole, limiting where they can move, what jobs they can take and even whether or not they can start their own business.
The average student loan debt is more than $30,000 and the average student loan interest rate is 5.8%. meaning it could take more than a decade for some to pay off their loans.
Last year, Smith vowed to pay off the loans of Morehoue’s graduating class and his team identified significant issues in the student loan structure including a lack of options to pay off the debt. As a result, students are usually limited to Parent PLUS loans and private loans. Both account for more than half of the debt incurred to attend HBCUs.
Smith has given away millions in charitable donations in recent years. In addition to giving to Morehouse, in 2016, he gave $50 million to the Cornell Engineering School and $20 million to the Smithsonian National Museum of African American History and Culture.
Last week, Smith admitted to the U.S. Department of Justice (DoJ) he knowingly hid funds in overseas accounts in order to evade taxes as part of a non-prosecution agreement. Smith will now pay back $130 million in taxes and will abandon more than $180 million in charitable contributions as part of the agreement.