Posted on 05/20/2019 7:49:33 AM PDT by Diana in Wisconsin
Full Headline: A Billionaire Commencement Speaker at a Georgia College Announced That He Will Pay Off the Class of 2019's Student Loan
A billionaire commencement speaker at Georgia's Morehouse college announced he would be paying off the graduating class's student loans.
Robert F. Smith, a technology investor and philanthropist who's CEO and chairman of Vista Equity Partners, told the 400-member Class of 2019 in his Sunday speech at the all-male historically black college that he would be creating a grant to wipe the graduates' student debt.
"My family is going to create a grant to eliminate your student loans," Smith, who is currently ranked as the 355th richest person in the world by Forbes, said to the graduating seniors. "You great Morehouse men are bound only by the limits of your own conviction and creativity."
Georgia's 11Alive News reported a Morehouse official said the gift was worth about $40 million.
Smith also pledged $1.5 million to the school and received an honorary degree from the college during Sunday's ceremony.
"This is my class," he said in his speech. "I know my class will pay this forward."
Smith, whose fortune has been estimated at $2.5 billion, was relatively unknown before making headlines as the second-largest private donor to the National Museum of African American History and Culture in Washington. His gift of $20 million was beaten only by Oprah Winfrey's of $21 million.
Student loan debt reached its highest level in history in 2019, totaling about $1.5 trillion among 44 million borrowers in the US.
The national default rate on student loans is about 11 percent, and Georgia's falls just above that average. Department of Education statistics said in 2018 that 16,538 student loan borrowers are in default in Georgia.
I hope the IRS shows some interest in these graduates.
This is quite generous of him. However it does bring up certain questions. Such as, is this going to be considered debt forgiveness by the IRS, so what these graduates get a big tax bill for debt forgiveness? Is this officially considered a gift for which gift taxes will be due?
Not to rain on the parade, but this sort of transaction will keep the CPAs and lawyers busy, in order to make sure everything is done legally.
Yay, Smith. Way to show these young men the value of honoring debts and taking personal responsibility. Idiot.
I saw a Forbes article that said the students will NOT have to pay any taxes on this ‘gift.’
But, you know - if you or I cheat Mother Government out of one confiscated DIME, we’ll hang at dawn, LOL!
Now, now, I think federal tax laws will regard the repayments as gifts. Why make the students tax debtors?
Not to be a wet blanket, but what about the kids and their families who saved and worked, pursued grants and scholarships, and thus graduated with little to no debt thanks to their hard work, budgeting and savings discipline?
I read that as saying this money (read "grants") will come out of a charitable trust (already created in the name of his family).
Not that such makes it any less wonderful.
That said, those students who worked their way through school so as to not need student loans are not rewarded for their industriousness while those kids who ran up big loan balances while partying weekends away at the frat house get a huge break.
Gift taxes are real.
Zeroing out the loans is a bad idea. “Free” is never truly appreciated and it teaches the wrong lesson in general.
If he was going to help at all and still teach these pampered millenials a lesson, he should have said: “I will pay off all of your student loans with the exception of $1500.00. You borrowed the money, and you should have some skin in the game paying off your loans. That is a life lesson that you must learn—NOTHING comes for free.”
Even if they have to pay taxes, this is awesome for them. I love people personally doing this. More should. Get the government out of college loans. This guy is a hero. I like that it was done after the students did the hard work.
Life isn’t fair. Same thing could be said about the kids born into bill gates family. Talk about being born with a home run.
My thoughts exactly.
I worked at a cannery in Alaska to earn college money. Also washed dishes in my frat house to pay for my room and board. Did other stuff, too.
Never had a loan, grant or scholarship (was offered a nice scholarship by Reed College but refused to attend that crazy place).
Remember when Oprah gave away all those cars - except the people could not afford the gift tax on them. :D
They should benefit too.
They shouldn't be ignored because they acted responsibly.
That’s one way to get cheap applause.
“That said, those students who worked their way through school so as to not need student loans are not rewarded for their industriousness while those kids who ran up big loan balances while partying weekends away at the frat house get a huge break.”
Gonna create some resentment.
No gift taxes on unlimited college tuition assistance, I believe.
So to most commentators here this is a bad thing because; not everybody gets this gift (socialist bull shit); or this man cannot be allowed to do what he wants with is own money (more socialist bull shit); or receiving kindness somehow is a bad thing and sends the wrong message to these young people; or the government tax these gifts (as if they don’t tax everything already? Wow, just wow!
This thread offers more than a few candidates for the role of the new Grumpy Cat.
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