Businessman Pays Off College Debt For Fifty High-Achieving Graduates

Jun 21, 2020 by apost team

Earlier this month, Frank Baker and his wife, Laura, have committed to paying Spelman College more than $1 million over the next three years to pay off graduates' student loan debt. 

Student loan debt is increasingly becoming the largest object facing young adults. On average, graduates receiving bachelor's degrees have over $32,000 in student loan debt. For graduate schools, the number can be even more intimidating. Many students likely daydream about a wealth benefactor stepping in and erasing their debt-related anxieties.

Frank Baker was motivated to act when he observed his colleague Robert Smith pay off the debt at another historically black men's college, Morehouse. Baker realized that as a local resident of Atlanta, he had a responsibility to step in and help graduates in any way he could. Perhaps there was a degree of one-upmanship as well, but we never begrudge competition when it fuels charity.

Surprisingly, his actions weren't motivated by collegiate pride. None of the philanthropists involved in this heroic effort attended either university. Rather, they saw an opportunity for making a positive change in their community and took it. Frank cites his feelings of gratitude towards the town that has made him the success that he is, and told Good Morning America he felt a "deep and driving responsibility" to make an impactful change.

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For many small colleges, student loan debt is not merely a matter of milking money form students. It is becoming increasingly common for small schools, especially historically black universities, to operate with terrifyingly thin margins. Thus, it is not simply a matter of the students not being able to pay. It is a matter of the schools not being able to survive without the income stream. As business owners, the Bakers understood this duality all too well. Baker told Good Morning America, "We need to make sure these schools continue to be viable. We are all part of the same community. It doesn’t matter if I went to [this] school or not." In short, community pride runs deeper than collegiate credits.

Baker's wealth did not come from local sources, however. As the founder of Siris Capital, a New York-based private equity firm, his wealth comes from a much different environment. Along with his wife, who is a successful startup entrepreneur in her own capacity, realized that they needed to give back to their chosen home. They had been speaking with Spelman's board of trustees for some time about implementing a more stringent financial assistance program. However, the financial impact of COVID-19 spurred the need for a faster change.

Many students were struggling to plan a future saddled by their debt. In fact, many were at risk of not graduating due to the debt load they face. To alleviate this injustice, Baker donated $1 million to a fund that alleviates the debt of graduating seniors for the next three years. Over $250,000 of this has already been paid to assist the most at-risk students, those who were at risk of not graduating due to a remaining balance for their tuition payments.

The debt load of students varied, but many students had over $15,000 put forth to clear their balance. One of these students, Gabrielle Sumpter, expressed her gratitude, telling Good Morning America: "It’s really meaningful that he invested in an institution that he knew was cultivating and developing young black women."

What is your favorite example of a surprise philanthropic change? Let us know in the comments and be sure to pass this article along to others!