Before billionaire Robert Smith took the podium at the Morehouse College graduation in May, some of the young men in the audience were about to start their postcollege lives owing tens of thousands, and in some cases, even hundreds of thousands of dollars. Then Smith pledged to pay off the student loans of all 396 members of the Class of 2019. The gift is estimated to be worth $40 million, according Atlanta Journal-Constitution.
In the U.S. alone, more than 44 million borrowers collectively owe $1.5 trillion in student loans, which are now the second highest consumer debt category only behind mortgages. This crisis has opened up a conversation about whether a college degree is worth the cost, since studies have shown debt leads many younger adults to delay major financial milestones such as buying homes, saving for retirement, and starting families.
For the Morehouse students and their families, that calculus is now different. Grow spoke with four graduates to get more information about their debt—and how being free of it has changed their plans for the future.
Aaron Mitchom, 22
When Mitchom heard Smith say, "My family is going to create a grant to eliminate your student loans," he was taken aback and was humbled. Smith "worked really hard for that money," he says, "and the fact that he wants to give it to us really hit the heart."
Originally from Atlanta, Mitchom graduated with a bachelor's degree in finance and plans to start a job in New York City. He had intended to use his earnings to pay off his debt: "I was already mentally and physically prepared to pay back loans for the rest of my life.”
Mitchom says Smith's pledge provides him an opportunity to pay it forward: "I plan to give back to Morehouse financially and also by giving my time to future students.”
Delmer Jones, 22
Before: He says he was $20,000-$30,000 in debt
Jones studied business administration and marketing while at Morehouse, and he planned to pay off those loans in two to three years. "Before the grant, I was betting on getting a job to pay the loans off and then potentially going back to school," he says.
Now he can make choices: "If I want to work, go back to school, get my master's, take a gap year, I can. My options are limitless."
Delmer was offered a job at AT&T that he's starting in the fall, and he’s happy he doesn't have to dedicate a portion of his new salary to his loans. "I think back to stories I've heard of older people who have been paying their loans off for 30+ years,” he says. "My mother also dealt with student loans early in her career."
His mother's struggle with debt showed him that student loans teach a lesson that no one should have to learn.
Overall, he calls the grant great and is using the momentum it gave him to help other students. He plans to start a fund for the incoming class of students at Morehouse.
Juan Clark, 21
Before: He says he was $10,000 in debt
Clark says paying for high tuition was not an option for his family. "At one point, my mother had three kids in college at the same time. My brother was a senior at Morehouse, I was a sophomore also at Morehouse and my sister a freshman at Spellman," he says. "For us to be able to attend those schools, we knew the majority of financial planning had to be around scholarships."
Although he received scholarships, he still graduated with $10,000 in student loans.
He recently moved to New Jersey from Atlanta to start a new job in health-care administration, and he's free to think big: "Instead of allocating those funds to paying back debt, I can allocate them towards getting a better apartment. I also plan to attend med school, so I now have more financial freedom to pay for that."
He mentioned that paying it forward is a priority for him too: "As senior class president, I am working with my class to create a campaign to help the class of 2020."
Cameron Edge, 22
Before: He says he was $150,000 in debt
Edge, who studied sociology and African-American studies, was prepared to go into a career he wasn't particularly interested in to be able to pay back his debt. "I wasn't passionate about doing sales, but I was under the impression that it would be easier to pay off your student debt. I was looking for a job with Amazon or AT&T just because of the financial benefits,” he says.
Now he feels free to explore other options: "My goal is law school, so a journalism job, working on someone's campaign team or in the Mayor's office is better suited towards my interests.”
Edge is grateful that his father started teaching him about money at a young age by using board games. Edge's mother Athena, who, like so many other parents these days , was also liable for Cameron's student loan debt, emphasizes the need for young people to achieve financial literacy: "Without some knowledge about credit, loans, and general finances, kids will find it difficult to operate through adulthood."
Even before Robert Smith's speech, Edge says, community service was a big part of his school's tradition. "Morehouse taught us how to be a service to the community: to be a liaison, to make initiatives, plan activities, and keep a presence in the community. Now that my loans are paid off, I can have a little more focus on being that service."
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