NEW YORK (NYTIMES) - Not even Morehouse College administrators knew the announcement was coming.
Addressing the college's class of 2019, Robert F. Smith, a man who is richer than Oprah Winfrey, made a grand gesture straight out of the television mogul's playbook.
"My family is going to create a grant to eliminate your student loans," he said on Sunday (May 19) morning, bringing the approximately 400 students in caps and gowns to their feet.
"This is my class," he said.
In January, Smith, a billionaire, donated US$1.5 million (S$2.06 million) to the college to fund student scholarships and a new park on campus. He received an honorary degree at the graduation on Sunday.
The value of the new gift is unclear because of the varying amounts the students owe, but the money will be disbursed through Morehouse College and will apply to "loans students directly have for their college education," a representative for Smith said.
Because Morehouse was not informed of Smith's plans before the ceremony, details about how the money would be distributed were not immediately available.
A private equity titan, Smith founded Vista Equity Partners in 2000.
After making a fortune in software, he was named the nation's richest African American by Forbes. According to that financial magazine, Smith's estimated net worth is US$5 billion, making him richer than Winfrey, who previously held the title of the wealthiest black person.
Smith studied chemical engineering at Cornell University and finance and marketing at Columbia Business School.
Although he shunned the spotlight for many years, Smith has recently embraced a more public role, speaking at the World Economic Forum in Davos, Switzerland, and making major charitable contributions.
Cornell named its chemical and biomolecular engineering school for him after he announced a US$50 million gift, and he has made major donations to the National Museum of African American History and Culture.
He started the Fund II Foundation, which is focused in part on preserving African American history and culture, and signed the Giving Pledge, a campaign through which wealthy individuals and families commit more than half their wealth to charitable causes, either during their lifetimes or in their wills.
Anand Giridharadas, the author of "Winners Take All" and a frequent critic of big philanthropy, said Smith's offer was "generous."
But, he added, "a gift like this can make people believe that billionaires are taking care of our problems, and distract us from the ways in which others in finance are working to cause problems like student debt or the subprime crisis on an epically greater scale."
Sunday's announcement came amid growing calls to address the crushing burden of student loan debt in the United States, which has more than doubled in the past decade.
Over the past 20 years, average tuition and fees at private four-year colleges rose 58%, after accounting for inflation, while tuition at four-year public colleges increased even more, by over 100 per cent, according to research from the College Board.
According to federal data, the average federal student loan debt is US$32,000. The standard repayment plan for federal student loans is up to 10 years, but most students, according to research, take far longer than that to pay off their balances.
For the students at Morehouse, an all-male, historically black college in Atlanta that costs about US$48,500 per year to attend, the gift could be transformative, especially in the unsettled years after graduation.
In an interview with the The Atlanta Journal-Constitution, Elijah Dormeus, a 22-year-old business administration major carrying US$90,000 in student debt, said: "If I could do a backflip, I would. I am deeply ecstatic."
Smith's prepared speech did not include his plan to pay off the students' debts.
"Now, I know my class, who will make sure they pay this forward," Smith said Sunday morning.
"And I want my class to look at these alumni, these beautiful Morehouse brothers - and let's make sure every class has the same opportunity moving forward - because we are enough to take care of our own community."