Billionaire pledges to pay off Morehouse graduate's debt

[HoughMade]

https://www.cnn.com/2019/05/20/us/morehouse-robert-smith-student-loans/index.html

During his commencement address, billionaire Robert Smith announced that he would be paying off the student loans of the entire Morehouse College class of 2019.

It's a great thing he is doing. I hope this impresses these young men so much that they make the most out of this opportunity and do good for others, as well.

 

[Jeepfanatic]

https://www.cnn.com/2019/05/20/us/morehouse-robert-smith-student-loans/index.html

During his commencement address, billionaire Robert Smith announced that he would be paying off the student loans of the entire Morehouse College class of 2019.

It's a great thing he is doing. I hope this impresses these young men so much that they make the most out of this opportunity and do good for others, as well.

Crazy Bernie is probably foaming at the mouth while screaming at the sky that it was the role of the Government to pay for their loans.

 

[hoosierdoc]

I would like to see how people handled the news. Did they go nuts? Did they spend a whole bunch


Also, how does that work from a tax tandpoint. Will they owe income taxes on that money? Or is there a gift tax of some sort? Maybe he will net up the donation to cover all of that.

 

[Trigger Time]

This popped up in my news feed yesterday. I went ahead and listened to hos whole speech. I must say, i like the man based on this 1 speech only. I don't agree with everything he said but his perception is his reality and not my place to judge. But I see him as a fellow American and ally.
His act of generosity is a great example to others and set those young men on a clean path for bright futures. His words of inspiration and motivation are just as important and encouraging. I hope they listen to him and pay it forward.

 

[Doug]

Were there any students who worked their way through and graduated without debt? Is their planning and hard work rewarded?

 

[HoughMade]

I would like to see how people handled the news. Did they go nuts? Did they spend a whole bunch


Also, how does that work from a tax tandpoint. Will they owe income taxes on that money? Or is there a gift tax of some sort? Maybe he will net up the donation to cover all of that.

Not income to the students. Gifts are not taxed to the giftee, but this is being done through a foundation, so I imagine there will be no tax to be paid by anyone. Rather, it will be a tax deduction for the foundation. Look like everyone wins.

 

[HoughMade]

Were there any students who worked their way through and graduated without debt? Is their planning and hard work rewarded?

To that, I would say hard work is its own reward. No one deserved anything, so a gift to some isn't unfair....not that there won't probably be people who think it was unfair.

 

[JeepHammer]

I think it's a good deal all the way around!

Working hard, getting through collage, just STARTING life with $100,000 of student loans sucks real bad!
Since these are the best, let's hope they do well and do good in turn.

 

[Dirtebiker]

Were there any students who worked their way through and graduated without debt? Is their planning and hard work rewarded?

That was my first thought when I saw this on the news.
not to put down the generous gentleman, but it would be nice to give to all students and not just those in debt.
Maybe give the same amount to each student? Just a thought. It’s his money, he can do what he wants.
Very nice!!!

 

[Jeepfanatic]

I think it's a good deal all the way around!

Working hard, getting through collage, just STARTING life with $100,000 of student loans sucks real bad!
Since these are the best, let's hope they do well and do good in turn.

My wife's parents encouraged her to go to a private pharmaceutical college out of state so she could be done in 6 years instead of 7. They never told her what $200k worth of debt would feel like on top of a car loan, mortgage, raising kids and trying to live life.

I guess I shouldn't have been surprised to find out that they were upside down on the $80k townhouse that they bought in the late 80s that was/is worth mid $300s.

 

[HoughMade]

My son just graduated from college last week debt free. It's a good place to be at his age. I like to feel like I did, on a small scale, what Robert Smith is doing on a large scale. Either way, big student loans are a drag on the economy, both for individuals and for the country.

Great podcast recently on Freakanomics about some innovative ways to avoid that albatross.

 

[Jeepfanatic]

My son just graduated from college last week debt free. It's a good place to be at his age. I like to feel like I did, on a small scale, what Robert Smith is doing on a large scale. Either way, big student loans are a drag on the economy, both for individuals and for the country.

Great podcast recently on Freakanomics about some innovative ways to avoid that albatross.

Once my wife's loans are paid off next June we will be starting 529 plans for the girls. They won't know about the funds until right before graduation to ensure that they take their debt seriously. They will also have to explain the ROI for their degree before I would consider helping. I will not help them pay for a Bachelor's in Native American basket weaving.

 

[Kutnupe14]

While I give kudos to the guy. The poor bastard can never give a college commencement again. Ohhhh wait... that might have been the plan all along.

 

[schmart]

Once my wife's loans are paid off next June we will be starting 529 plans for the girls. They won't know about the funds until right before graduation to ensure that they take their debt seriously. They will also have to explain the ROI for their degree before I would consider helping. I will not help them pay for a Bachelor's in Native American basket weaving.

Jeepfanatic,
I'm not sure if you mean right before High School graduation, or right before College graduation. I certainly don't want to tell you how to spend your money or raise your kids, but, if you mean the latter graduation, I highly suggest discussing your plans with a tax expert. When we've drawn from our 529s we had to be able to show relevant expenses in that year for the withdrawal to be tax free. I'd hate for you to decide their degree was worth it, and that you'd pay for it but then incur a $20K tax bill on an $80K education (yes you can go to a good school even out of state on $20K/year), where as if you paid it yearly, would have been tax free.
--Rick

 

[Dirtebiker]

My son just graduated from college last week debt free. It's a good place to be at his age. I like to feel like I did, on a small scale, what Robert Smith is doing on a large scale. Either way, big student loans are a drag on the economy, both for individuals and for the country.

Great podcast recently on Freakanomics about some innovative ways to avoid that albatross.

Innovative? Like what? Work and save while in high school? Work while in college? Attend an in state public college? Live in a dorm or at home? Have parents who either can pay out of pocket or who saved for your education?

 

[1775usmarine]

I served 4 yrs and used my GI bill to get a 2yr degree in diesel tech. The 4 yrs in helped set me up to realize my thinking of doing the bare minimum in high school and I'll get by or someone will give it to me was all wrong.

 

[Trigger Time]

To that, I would say hard work is its own reward. No one deserved anything, so a gift to some isn't unfair....not that there won't probably be people who think it was unfair.

This is how I feel on that too. I dont like the "im owed something" attitude we see so prevalent today in society. This is why we are in a lot of messes today.
What happened to being excited for the other guy too? If anything they have the bragging rights that no one paid theirs for them. Or at least the doctor is what im meaning.

Of coarse we see people in our society who alreay turn this guys possitive act into a negative. Some people just like to be miserable all the time I think. Always complaining about service or this and that trying to get something free.

 

[HoughMade]

Innovative? Like what? Work and save while in high school? Work while in college? Attend an in state public college? Live in a dorm or at home? Have parents who either can pay out of pocket or who saved for your education?

Those are all great.

And there there are income sharing agreements which can be good for investors and much better for the student than loans.

Let's take Purdue as an example of in-state public college. It's around $22,000 per year, all in. That's actually pretty reasonable and Mitch Daniels has done a great job of trying to control costs. However, for a student who is going to pay all on their own, that's a deep pull even working in high school and working throughout the year if you want good grades.

Enlisting is also great. I went to college on saved money, money from my parents and some from Uncle Sam. However, looking around, I don't want every college student enlisting. Neither do you.

With income sharing agreements, private investors pay the tuition to the school in return for a percentage of the student's income once they graduate. The terms vary, but can be something like 15% for 3 years or 3 to 6% for 5 or 6 years, depending upon major. Once you pay for the term, you are done. I see it an a viable option for many people and it can certainly be better than loans.

 

[DoggyDaddy]

Those are all great.

And there there are income sharing agreements which can be good for investors and much better for the student than loans.

Let's take Purdue as an example of in-state public college. It's around $22,000 per year, all in. That's actually pretty reasonable and Mitch Daniels has done a great job of trying to control costs. However, for a student who is going to pay all on their own, that's a deep pull even working in high school and working throughout the year if you want good grades.

Enlisting is also great. I went to college on saved money, money from my parents and some from Uncle Sam. However, looking around, I don't want every college student enlisting. Neither do you.

With income sharing agreements, private investors pay the tuition to the school in return for a percentage of the student's income once they graduate. The terms vary, but can be something like 15% for 3 years or 3 to 6% for 5 or 6 years, depending upon major. Once you pay for the term, you are done. I see it an a viable option for many people and it can certainly be better than loans.

Almost sounds like indentured servitude, only the students aren't actually "serving" their financial backers. Interesting option though. I'd not heard of that before.

 

[hoosierdoc]

Almost sounds like indentured servitude, only the students aren't actually "serving" their financial backers. Interesting option though. I'd not heard of that before.

Federalized student loans are indentured servitude. Massive fees and rates and then “we’ll pay them off for you if you do X...”

think those poele are going to speak out against .gov?