Graduates of Morehouse College in Atlanta arrive for their ceremony on May 19, 2024.
Andrew Caballero-Reynolds—AFP/Getty Images

Five years ago, as I delivered the Morehouse College commencement address, the class of 2019 received a gift that would change their lives. I announced that I was eliminating their student loan debt. I was motivated to make this gift after I found out that just 38% of students who began at Morehouse College actually graduated in four years. It was not because of grades, requirements, or bureaucracy—but because of money. It was too expensive. Too many people had the ability but not the means to succeed. I was shocked into action.

I wanted to relieve the burden of student loan debt for those 396 Morehouse men to begin building their lives free of student debt. The truth is one-off student debt relief, like the Morehouse College gift and recent moves by the White House, did provide relief to many deserving college graduates. But it is not a structural solution to the problem. If we want to really prepare and equip future generations to be able to afford college, we need scalable solutions where everyone has skin in the game. Families and students across the country are faced with the rising costs of college tuition. At the rate we are going, it will take the average American family 75 years to send just one student to a top-rated university.

That is why I’m proposing a three-levered plan to tackle this national crisis. First, we need to support and expand nationwide efforts of established philanthropic organizations with successful models that make college more accessible for underserved students. Second, the private sector must increase aid to our colleges and universities and support new and innovative pathways for employees to pay off student loan debt through tax-advantaged savings plans. Finally, we need to bolster support for community colleges, which provide critical pathways to universities and careers for many Americans.

The student debt crisis needs our urgent attention. As of Q1 of this year, Americans owed more than $1.75 trillion in federal student loans—a 250% increase from just 17 years ago. College is becoming so expensive that it is almost out of reach for many middle-class families. Addressing this issue unlocks economic growth for our nation. College graduates on average earn $1 million more over their lifetimes than non-college graduates. If graduates are free from the burden of student debt, they will have real opportunities to build careers, buy homes, start families, and establish businesses in their communities.

Philanthropy is a powerful tool for college affordability, and rather than reinvent the wheel, we can leverage models that have already proven their outsized impact. Following my gift to the Morehouse College Class of 2019, I worked with partners to create Student Freedom Initiative (SFI) to help more students affordably attend college. Focusing specifically on historically Black colleges and universities (HBCUs), other minority-serving institutions, and tribal colleges and universities, SFI provides Student Freedom Loan Agreements (low-interest-rate loans with flexible repayment structures for students studying STEM), which open the doors to high-paying career options without crippling financial burden from those studies.

SFI is not the only organization providing this needed financial support. Organizations like the United Negro College Fund and the Thurgood Marshall College Fund (both of which my Fund II Foundation has supported) and generous contributions from philanthropists like MacKenzie Scott, Ruth Gottesman, and others have provided scholarships and other forms of funding. But we need more support for these organizations, and we need other philanthropists and foundations to recognize the transformational potential of giving to colleges and universities.

The second part of the solution is the private sector. Corporations can—and should—make contributions to nonprofits supporting students. In 2021, Cisco pledged $150 million to SFI, including $100 million to bolster the cybersecurity and IT infrastructure at HBCUs, including cloud services. Many of these universities had outdated infrastructures and could not afford upgrades to meet new federal standards for protecting sensitive online data. By working with SFI, Cisco impacted 42 HBCUs and 200,000 students, saving these institutions $1.5 billion in federal Title IV funding.

The private sector can explore new and creative ways to facilitate paying off loan debt. With recent changes in federal legislation, policymakers have enabled employers to help ease the student loan crisis through tax-advantaged plans like 401(k)s and 529 college savings plans.

Some young people, burdened with student loan payments, are unable to make contributions to their retirement plans, missing out on years of compounding growth. An education-specific provision of the SECURE Act 2.0, which took effect this year, enables employers to match up to $5,250 in contributions to 401(k)s when employees make payments toward their student loans. This is a way for many companies to utilize an existing tool to benefit employees with student loan debt. This same opportunity exists for 529 college savings plans. The original SECURE Act, signed in 2019, enabled a lifetime limit of $10,000 in 529s that can be used to repay student loans. Employers should also match employee student loan payments with tax-advantaged contributions to 529s.

The student loan debt data shows that if we elevated the lifetime limit of 529 college savings plans to $40,000, we could work toward eliminating student debt for nearly 80% of existing borrowers. This would not be achieved with a hand-out but instead through expanding an existing tool that encourages people to contribute to 529s with a state income-tax deduction. We could also make 529 contributions federally deductible, further incentivizing Americans to contribute, much like they do to their retirement plans.

These are not just acts of charity by corporations—they are investments. Thriving employees lead to thriving companies, and by working with employees through these mechanisms, companies can build stronger relationships with their teams, help ease the personal impact of student loan debt, and provide an appealing benefit for talent looking for their next opportunity.

The third lever involves our robust system of community colleges, which have long been a pathway for an affordable education. We need to develop strategic alliances and put students on pathways to job training in technical fields or four-year degrees. California recently established the Cal-HBCU Transfer Grant Program, which awards up to $5,000 to California community college students who transfer to HBCUs and intend to return to California after graduation. This is just smart business for local economic growth.

It has been incredible to watch the 396 Morehouse College men begin their careers free of student loan debt. They have been able to pursue advanced degrees; accumulate down payments for their first homes; and make investments in themselves, their careers, and their families—all of which may not have been possible without financial relief. And, this spring, we celebrated the graduation of the first cohort of students who received SFI financial support, which exceeds 500 students who have received $6.4 million across the 31 participating institutions.

We need to ensure that the millions of other Americans with crippling student loan debt have those same opportunities. In a deeply competitive global economic and geopolitical environment, we cannot afford to have future generations of Americans avoiding higher education because of the escalating cost. It is a national imperative that we address this crisis. Utilizing a combination of proven solutions, existing tools, and new policy changes, while involving nonprofits, the private sector, and our community college systems, I am convinced we can bring to fruition the promise of the American Dream.

Robert F. Smith is the Founder, Chairman, and CEO of Vista Equity Partners. He is a member of the 2020 TIME100.

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