By now, I’m sure that everyone has heard about the billionaire philanthropist Robert Smith, who pledged, during his commencement speech, to erase the student loan debt of the 2019 graduating class of Morehead State University. A noble and jaw-dropping gesture as far as the graduates were concerned.
In addition to a $1.5 million pledge to the university that Smith had already announced, it’s estimated that the total grant pledge could approach $40 million.
“On behalf of the eight generations of my family that have been in this country, we’re going to put a little fuel in your bus. This is my class, 2019. And my family is making a grant to eliminate their student loans,” Smith said in his remarks. “I know my class will make sure they pay this forward ... and let’s make sure every class has the same opportunity going forward, because we are enough to take care of our own community.”
Now, don’t get me wrong. I think that this is a noble thing to do and encouraging students to pay this forward is commendable, but let’s do some math and look at the big picture.
Smith pledged $40 million to pay off the student loans of 398 graduates. On average, that’s a little more than $100,000 in student loan debt per graduate in the 2019 class. That’s just Morehead State.
Can we agree that the real problem that needs to be addressed is the entire breadth and scope of the student loan debt issue, not just the debt of 398 students?
In total, there is more than $1.5 trillion in outstanding student loan debt held by more than 44 million Americans. Ten percent of all student loan debt is held by people in their fifties as a result of either carrying student loan debt from college throughout their lives, taking on student loan debt on behalf of their own children, or both.
In 2018 alone, colleges and universities awarded an average of 1.8 million bachelor’s degrees and 750,000 master’s degrees. Most of those students will graduate with student loan debt averaging about $37,500 per student. On average, that’s $28 billion in additional student debt each year.
Federal policy requires a good hard look at the affordability of a college and university education. We require a reset on career and technical education as a viable choice again for many students. We need a refocus on apprenticeships.
The 2020 presidential campaign trail will be rife with ideas about how to fix this issue for our nation. Let’s hope that we can come up with solutions that will ease the student loan debt burden for students already saddled with debt and provide other pathways for the next generation of students.
Shortly after Smith’s graduation speech at Morehead State, Burger King announced a sweepstakes in which the company would pay off up to $250,000 in student loans. That’s a nice marketing and public relations gimmick, but not among the real solutions our country’s next generation needs to launch their lives and careers.
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