America’s richest Black man is back and he’s spending money on the Family once again.
After paying $34 million to settle the loan debt for the nearly 400 students who graduated that spring from Morehouse College, Vista Equity Partners CEO Robert F. Smith is back & looking to aid even more Black youth .
“That was a transformational gift. But it doesn’t scale. It was for one institution, for one class of students.” says Keith B. Shoates, vice president of the office of the CEO at Vista Equity Partners.
Smith has taken the aid a step further, pledging to reduce student debt at historically Black colleges and universities (HBCUs) where students graduate with a median debt of $29,000, or about 32 percent more than their peers from other institutions.
Just this summer, Smith was instrumental in establishing the Student Freedom Initiative (SFI), a nonprofit that aims to provide financial and career support for HBCU students. SFI is funded by a pair of $50 million contributions—one from Smith personally, and another from the Fund II Foundation, where Smith also serves as board president
Last week, the organization announced the first nine colleges that will be part of the program: Claflin University, Clark Atlanta University, Florida A&M University, Hampton University, Morehouse College, Prairie View A&M University, Tugaloo College, Tuskegee University, and Xavier University of Louisiana.
Beginning in fall 2021, the SFI program aims to serve 900 juniors and seniors who are pursuing STEM majors, says Shoates, who is also executive director of SFI. The plan is to eventually scale that number to support 5,000 students each year across all participating colleges.
An key component of the program is a financing vehicle called an “income-contingent financing alternative,” it allows rising juniors and seniors to borrow up to $20,000 per year after they’ve exhausted federal subsidized and unsubsidized loans, grants and other scholarships offered by their colleges.
For every $10,000 a student takes out, they agree to pay 2.5 percent of their salary every month for a set time after they get a job, as long as they are earning at least $30,000. All repayments go back into the SFI fund to support future students, with the goal of making this a self-sustaining fund.
–Sylvester Loving, B1Daily