"My family will create a grant to eliminate their student loans," he told the recent graduates in Atlanta.
The announcement, in which Smith urged graduates to follow their example of paying them, received a big ovation and chants from "MVP".
The sum among the 396 students totals approximately $ 40 million, said Morehouse president David A. Thomas. He called Smith's gesture "a gift of liberation."
"When you have to pay a debt, the options on what you can do in the world are limited," he said. "(Smith's gift) gives them the freedom to follow their dreams, their passions."
Students say they are overwhelmed with gratitude
The students could not believe what they were hearing when Smith made the announcement, three graduates of the men's college told CNN.
"It will sink as the years go by, I know for sure," he said. "I still do not have words … it makes a great day much better".
Epps said he has about $ 35,000 in student loan debt that his parents in Pleasanton, California, had promised to help pay. I could not wait to break the news, he said.
In addition to the $ 90,000 debt of the 22-year-old New Yorker, he said his mother took out a loan to help him out of school.
"Everything that worked, everything he gave was not in vain," said Dormeus when asked what Smith's gift to his family meant.
Smith has made many other charitable donations.
His benefactor also received an honorary degree on Sunday, along with actress Angela Bassett and psychologist Edmund Gordon.
The businessman, founder of the investment firm Vista Equity Partners, has an approximate value of $ 5 billion, according to Forbes.
The 56-year-old was a chemical engineer at Goodyear and Kraft before attending business school. He worked for Goldman Sachs, specializing in technology investments, before starting Vista Equity in 2000.
Vista Equity invests solely in software, data and technology companies and has capital commitments of $ 46 billion, according to the company's website.
Smith has a pretty generous streak. In 2016, Cornell University, one of its souls, changed the name of its chemical and biomolecular engineering school in honor of the investor from Austin, Texas, after it pledged to donate $ 50 million to the school. He has also donated millions for cancer research and the arts.
Its Fund II Foundation provides grants on five pillars: preserving the African-American experience, safeguarding human rights, conserving the environment, providing music education and sustaining "critical American values such as entrepreneurship," says the organization.
In 2017, Smith signed the Commitment to Give, an effort spearheaded by billionaires Warren Buffett and Bill and Melinda Gates to convince wealthy Americans to give away half of their fortunes.
By signing the pledge, Smith said he would focus on the causes that support equality for black Americans and the environment. His wife, model Hope Dworaczyk Smith, will focus on helping children, she wrote.
"I will never forget that my path was paved by my parents, grandparents and generations of African-Americans whose names I will never know," said Smith. "Their struggles, their courage and their progress allowed me to strive and achieve, My story would only be possible in the United States, and it is up to us all to pay the inheritance onwards."