(AP Photo/Jose Luis Magana)
Former New York City mayor Michael R. Bloomberg announced Sunday that he will give $1.8 billion to his alma mater, Johns Hopkins University.
Here’s what you need to know.
The Gift
The historic gift will be devoted exclusively to undergraduate financial aid, and make admissions at Johns Hopkins “forever need blind” — that is, applicants will be admitted solely based on merit without regard to their financial resources.
With this latest gift — considered the largest individual gift ever to an educational institution in the U.S. — Bloomberg wants to ensure that “we reward people based on the quality of their work, not the size of their pocketbook.”
“Our university was founded in 1876 by a visionary $7 million gift from the Baltimore merchant Johns Hopkins,” Johns Hopkins President Ronald J. Daniels said in a statement. “When it was announced, it was the largest gift of its kind. It created America’s first research university and changed the face of American higher education. With today’s announcement of Mike Bloomberg’s $1.8 billion investment in financial aid, history has repeated itself.”
Bloomberg, who has already given $1.5 billion to Johns Hopkins to support research, teaching and financial aid, wrote in the New York Times that his latest gift will create impact in at least four ways:
- allow more generous levels of financial aid, particularly for qualified low-income and medium-income students
- replace student loans for many students with scholarship grants
- lower the amount of student loan debt
- make the school more socioeconomically diverse
Bloomberg earned a bachelor’s degree from Johns Hopkins in 1964 and is the founder of Bloomberg L.P., the global business and financial information and news company. He made his first contribution — a $5 gift — to Johns Hopkins in 1965.
Bloomberg also signed Warren Buffett and Bill Gates’ Giving Pledge, and has committed publicly to give away at least half of his wealth. Prior to this commitment, Bloomberg has donated $6.4 billion to various philanthropic causes.
Student Loan Debt
Bloomberg’s gift will make Johns Hopkins student loan-free, which will eliminate student loans from undergraduate financial aid packages at the Baltimore university starting next fall.
As a result, admitted students will receive scholarships that do not need to be repaid. Currently, 44% of Johns Hopkins students graduate with student loan debt, which averages more than $24,000.
According to the latest student loan debt statistics from personal finance site Make Lemonade, there are more than 44 million borrowers who collectively owe $1.5 trillion in student loans. Student loans are now the second largest consumer debt category after mortgages. On average, graduates of the Class of 2016 owe $37,000 in student loans, and graduates of the Class of 2017 owe almost $40,000 in student loan debt.
Disclosure: Zack Friedman is a Johns Hopkins alum.