Billionaire Robert Smith announces new ISA for HBCUs
Billionaire Robert F. Smith announced earlier this week a new initiative that aims to limit student loans for historically black college and university students, Time the magazine reported.
The Student Freedom Initiative will launch in fall 2021 in up to 11 HBCUs – the exact list of colleges is still being determined. The program will provide science, technology, engineering and math students with an alternative to private student loans. Unlike a scholarship, students will be required to repay the support they receive from the initiative through income-based repayments.
The initiative will be launched with a $ 50 million grant from the Fund II Foundation, of which Smith is founding director and president. The foundation has set a goal of raising $ 500 million by October, with the goal of creating a stand-alone program through investments and repayment of graduates.
Similar revenue sharing agreements have been critical in the past. Skeptics argue that high-income graduates could end up paying more than they would with traditional student loans, and that such deals lock students into long repayment periods. Supporters say the programs are innovative ways to finance higher education at a time when concerns about traditional forms of student debt are high. The discussion is particularly important in this case, as studies have shown that student loan debt can be a particular burden for black borrowers, black students. more likely in default than white students.
Smith made headlines last year when he donated $ 34 million to Morehouse College, paying student debt for 400 graduates.