So much has happened since I designated the African-American mogul an Ethics Hero for spontaneously announcing that he would pay off an entire graduation class’s college debt that I almost forgot about Leslie’s provocatively contrary Comment of the Day. Triggered by the backlash against Oprah Smith’s generosity provoked, Leslie launched a critical barrage against Smith, or what his gift symbolizes. She backed down a bit in a later comment on the thread, but her original post is thought-provoking.
In addition, Leslie gets special credit for the Mansa Musa reference. I would include the Mali ruler in the cultural literacy list except for the fact that our culture almost completely ignores major Islamic historical figures.
Here is her Comment of the Day on the post, Ethics Hero: Robert F. Smith:
Don’t belittle Oprah– she bought everybody KFC. Robert Smith isn’t even feeding anybody. Robert Smith isn’t even teaching anybody how to fish in order to feed themselves for a lifetime.
I’m sure he means well, but I don’t think that paying off somebody’s college loans is helping that person become independent and self-reliant. They’re getting out of the contracts they signed in order to finance their careers. Maybe they’ll remember that and pass the favor on and the world becomes a better place.
Or maybe the college education market will be thrown into MORE disarray with a flood of copycat donations the way it was thrown into disarray by government subsidies and the cost of education will go up AGAIN because students are not responsible for the cost of their education. When Mansa Musa passed through Cairo, he gave away so much gold that the economy collapsed and the next time he passed through, he had to buy it all back to restore the economy. If he wanted to do some good, he should have just helped some poor people. That’s the nice thing about poor people– giving your money to them is fairly harmless.
But able college grads? It just seems like a bad idea. I graduated 2010 when everybody was begging the government to pay off their loans for some strange reason. I paid every penny back on my loans. The idea of somebody else paying that for me… just insulting. I incurred those loans. Nobody else. A college grad is not a charity case. Robert Smith could have started a legal aid program, food pantries, etc. But he bestowed his wealth on… college grads. Okay. Yay for handing a crutch to people who can walk under their own power.
Ethics Alarms 
I’ve wondered (out loud at times) whether academic scholarships are a good idea. I wonder whether the decadent, socialist faculties we seem to have these days aren’t the result of giving scholarships to smart kids, or seemingly smart kids, or minority kids, who then develop a sense of entitlement that warps them for the rest of their lives. “I’m smart. I deserve a scholarship,” turns into “I’m smart, I deserve tenure in an obscure, useless field of study,” turns into “Everybody deserves free stuff from the government or somebody, because, well, because that’s how I got where I am and it is good.” This observation did not go over well with my tremendous, extremely level-headed, clear thinking college professor friend who’d gone all the way through Duke to his Ph.D. on scholarships because he was bright (first in his undergrad class at Duke) and his father had died and his uncle stole the family business from his mother.
I don’t think so. This may be purely anecdotal, but ALL of the *academic* scholarships I’ve encountered (my own and my friends and vicariously through people I knew in other colleges) were simultaneously competitive AND easy to lose after gaining them. I don’t know anyone who received an *academic* scholarship with an entitled attitude. I was offered an almost full ride to Texas A&M from an extremely generous donor. Which I promptly lost my freshman year when posting a GPA below the scholarship requirement. The money went to another “deserving” student (who hopefully maintained it for several years of their education).
From the other angle…the donor’s point of view…these types of scholarships are “investments in the collective future”…investments in individuals who look like they will pay off by producing greater value for the community than the initial value of the donated scholarship. And before the resident socialists get all shakey-legged at my phraseology and start screaming about how I should love the notion of State spending along those lines, these private donations for scholarships differ substantially from federal loans. And I think most recipients of the privately funded scholarships KNOW they aren’t entitled to them.
I don’t disagree that there is a huge entitlement attitude among many of the children who receive funds (I just think you find that attitude more in the people whose money came easy with almost no risk and almost no caveats…like you get with publicly funded or publicly backed loans).
I have found that the publically available funds (grants, federal loans) have been given almost exclusively to minorities of one stripe or another, and thus these people ARE entitled (de facto) to all of that money. It invades their thinking as OB suggests.
Prvate money, in my experience, is how you have described, Mike.
Given that Mr. Smith is an excellent businessman it does not surprise me that he decided to invest his dollars where he thought they would produce the most return. You can make a strong case that subsidizing young people who demonstrated motivation and intelligence to complete four years of undergraduate work makes more sense than putting money into the black hole of simple poverty relief. I see him trying to send an early message to young minority students that hard work and diligence can pay off in the most unexpected ways.
You want some “cultural literacy”? Drunk History has got you covered:
http://www.cc.com/video-clips/9nn3kj/drunk-history-mansa-musa-heads-to-mecca-like-a-boss
I can understand the risk of students expecting a free ride, that they would overborrow and hope to avoid the drudgery of repayment. But these students had no idea it was coming. Yeah, some will go overboard and repeat overborrowing and hit the rocks. But that would have happened anyway without the gift.
The gift was too late to help those who just fell through the cracks without grants or loans, or took a year off to earn their senior year. (I was in that stop and go group with loans overhead) Those have a reason to be irritated about missing the gift while they weren’t racking as much debt.
But most students will be in neither of those groups. They aren’t in extreme, as long as they can find related employment quickly enough. Taking a less related job funnels into a dead end subfield where getting out is expensive retraining. Envy will be common in the ones who missed the bonanza, and that is one of the deadly sins. Stress on the lucky grads will be far lower for a long time giving more flexibillity for any life choices like jobs, marriage, and children. This gift will just represent a larger cushion, the graduates’ choices and grit are still more important in the long run.
I would be furious if I saw a nation-wide movement to forgive student debt.
The exact people who would benefit MOST from free money are the ones who don’t need it. They are the ones who make GOOD financial choices, seek wise avenues of investment, know how to sacrifice some things in order to avoid monetary sink holes, don’t stand on shakey ground. They are the ones who hustled and tightened their belts to get out of debt ON THEIR OWN or didn’t take foolish amounts of debt to begin with.
They would make good on a financial windfall and turn a pile of silver into a mountain of gold with all of the beneficial secondary effects on their community and others in their market.
But no, they would never receive such a windfall, because they don’t “need” it. The ones who make awful choices and squander opportunities or pick unserious pursuits or choose routes that won’t increase the community’s value….they get the free money.
To inevitably squander again.
But remember that some of the ones who will have their loans forgiven will also include the modest 10k loans along with the 100k loans. It is unkind to tar ALL the beneficiaries as spendthrift in this rush. College students with loans are not a homogenous group. What about the students with more marketable degrees who are lower risk than basketweaving? Or in a specialized neonatal degree that is expensive for other reasons?
Some will waste the gift, most lives will be improved, and some will parlay the gift into something amazing. That bell curve is inevitable and Mr Smith will count the cost well worth it.