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Billionaires Can't Save Us From Student Loans

Billionaires Can't Save Us From Student Loans
Credit: Associated Press

By now I’m sure you’ve seen at least a headline about the Best Graduation Speech of 2019 So Far: Robert F. Smith shocked 396 new graduates last weekend when he informed Morehouse College’s class of 2019 that he planned to pay their student loans. All of them.

The billionaire did not immediately explain to the institution how he would go about paying this collective tab, which is estimated to be as much as $40 million. Smith, with an estimated net worth of $5 billion, is no stranger to making contributions toward academic pursuits. But for a graduating student staring down student loan payments for the next 10—or more—years, it’s a lot to take in.

Tuition with room and board at Morehouse was $48,500 this past year. The average student loan debt for graduates of private colleges is $32,300. Any way you slice this, it’s a boatload of money—even if you just multiply $32,300 by 396, you get an estimated tab of $12,790,800. Woof.

So this is the solution, right? We just wait for the super rich to hand over checks that make debt vanish? Not so fast. If you add up the net worth of the 10 richest people in the United States, it comes to $729.7 billion. Meanwhile, as a nation, we’ve got about $1.56 trillion in student loan debt. Combine Bezos and Gates and Koch and the other Koch et. al., and we’re not even close to a collective payoff. (And that’s a pie-in-the-sky example anyway, because the likelihood of these guys giving away every penny of their worth is so low it’s laughable.)

That’s why it’s so hard to embrace or dismiss any one potential solution to the student loan debt crisis, as much as I gaze longingly at each. Elizabeth Warren’s plan to tax the “ultra-rich” estimates would provide $2.75 trillion in revenue over a ten-year period, but alongside student loan debt relief, that funding would also go toward universal childcare, the Green New Deal, and Medicare. Warren’s plan would help burdened borrowers, but wouldn’t be the quick fix so many of us long for. NYU’s offer of free medical school is great, but only available to a limited set of new professionals. Employer loan-payment or matching programs save you time in the long haul, but first you have to get hired.

So yes, of course it’s amazing that this billionaire is paying the loans of 396 new graduates. But until something changes deeper within the system, we’re going to keep being surprised by rich people making such impressive offers. And then the novelty might start wearing off, and the public will pay less attention to those announcements, no matter how grandiose or understated. And then we’ll be right back where we started: probably sitting around wondering if anyone will ever get public service loan forgiveness.