The award for the most memorable commencement speech of 2019 goes to billionaire investor Robert F. Smith. He shocked nearly 400 all-male graduates of Morehouse College by announcing that he would pay off all of their student loan debt.

It’s wonderful that a successful alumnus would use his private money to wipe out the debt of an entire class of graduates. He just gave them a fresh start that their peers everywhere covet and hopefully inspires the grads and others to be generous with their blessings.

But, it also sends conflicting messages about making wise financial decisions to avoid debt versus racking up debt and praying for a Superman to save their day.

Here’s what happened.

Smith, an entrepreneur and founder of the investment firm Vista Equity Partners whose net worth was about $5 billion dollars, was giving a commencement address as is customary. When he said:

“On behalf of the eight generations of my family that have been in this country, we're going to put a little fuel in your bus.

“This is my class, 2019. And my family is making a grant to eliminate their student loans.

“I know my class will make sure they pay this forward … and let's make sure every class has the same opportunity going forward, because we are enough to take care of our own community."

His announcement went unnoticed for a moment. Then, shock, confusion, and disbelief followed as the class of all black men stood to their feet not quite believing what they heard.

They started shouting what sounded like “MVP.” The Most Valuable Player for the future, is probably what Smith instantly became for agreeing to pay off an estimated $80 million in student debt.

Here 3 great takeaways from this story:

  1. Private money versus taxpayer money. This was a gift from his family to other future alumni, not Washington wiping out debts. Federal dollars are what is driving the student debt crisis as colleges jack up their prices knowing that those bills will be paid by federal dollars. Forgiving all of that debt as some suggest puts taxpayers involuntarily on the hook for the decisions of others. Conversely, this was a private citizen voluntarily paying off the debt of other students. That is a worthy use of alumni dollars.

  2. Opportunity makes the American Dream possible. Smith, the son of two educators, rose to surpass Oprah on the list of billionaires last year. As he said, “My story would only be possible in America, and it is incumbent on all of us to pay this inheritance forward." He had opportunities that many young people struggle with because of student debt among other government-imposed barriers.

  3. Americans are super generous. Smith is a billionaire, but Americans – and not just the ultra-wealthy – donate to their alma maters and sundry other causes they believe in every day. We are by far the most generous nation on the planet. In part because Americans are religious but also because our can-do spirit doesn’t wait for the government to solve problems in our communities, but we pull out our wallets and phones and give ourselves.

Here are 3 cautionary notes:

  1. Students who saved shouldn’t feel shafted. Every student should be wise and try to avoid student loan debt. Those who worked their way through school, saved money or had savings from their parents, or simply attended the school they could afford it, should not feel like they made the wrong choices along the way.

  2. Students shouldn’t rely on a Mr. Smith to bail them out. Smith’s largesse is a wonderful gift but not the norm. Going to a college you cannot afford, and paying for it by incurring student loan debt will saddle young people for years–potentially decades. They should understand this before choosing the school as well as their earnings potential to repay those loans. If they still willingly sign the contract to repay, they should not do so hoping that in four years a wealthy alumnus or alumna will pay it off for them. That’s like relying on the lottery as your debt strategy.

  3. Reducing the government’s role in higher ed is a great strategy. Government’s role in higher ed is driving costs higher. As Carrie Lukas explained in a recent policy focus, “Ending government’s domination of higher education financing would also allow for additional innovation, such as more partnerships with businesses to help nance education and training, and other new lending paradigms.”

I applaud Mr. Smith for setting up these young men with a fresh start and no debt. We can celebrate that and hope other alumni pay it forward, but also recognize the ways that responsible financial decisions and reduced government can help all students.