(CNN) Billionaire investor Robert F. Smith's commitment to pay off the student loan debt for graduates of the historically black Morehouse College covers millions of dollars, the school said.

"When you have to service debt, the choices about what you can go do in the world are constrained," Morehouse President David A. Thomas said Sunday. "(Smith's gift) gives them the liberty to follow their dreams, their passions." Thomas told CNN on Monday that the exact amount of student loan debt to be covered was still being calculated.

Smith's gesture, which Thomas called "a liberation gift," will enable graduates to have more capital to do things like start businesses and support their families.

Studies show disparities in the amount of student debt African-American borrowers amass compared to their white counterparts.

Here are some reasons why Smith's pledge matters: