Smith's announcement comes after he had already pledged $1.5 million to the school.

It was a hot, sticky morning in Atlanta on Sunday when billionaire investor and philanthropist Robert Smith stood atop an outdoor stage on the campus of Morehouse College, and started delivering a speech that the nearly 400 graduates probably thought would be the usual commencement fare.

Smith described being bused to a high-performing, predominantly white school across town in Denver, where he grew up. He said he'll never forget climbing onto bus No. 13 to Carson Elementary.

"Those five years drastically changed the trajectory of my life," he said. "The teachers at Carson were extraordinary. They embraced me and challenged me to think critically and start to move toward my full potential. I, in turn, came to realize at a young age that the white kids and the black kids, the Jewish kids and the one Asian kid were all pretty much the same."

Smith told the graduates how he launched his lucrative career. He gave them wise words on grit and success. Then he deviated from his prepared remarks.

"My family is going to create a grant to eliminate your student loans!"

The grads and their families were speechless for a moment - before erupting in cheers and disbelief.

"There was amazement in the room, people's mouths dropped open," said Morehouse President David Thomas, who learned of the gift the same moment as the students. "Students were looking at each other like, 'What did he say?' Parents hopped up to hug each other."

It's hard to estimate the cost of Smith's gift to the 2019 graduates of the all-male historically black college, but it could be in the range of $10 million, according to estimates. There were 396 graduates in the class, and tuition, room and board and other costs run about $48,000 per year, Thomas said.

The audience exploded in chants of "MVP!" after Smith's announcement. Thomas said that could have either stood for Most Valuable Player, or as Thomas prefers, Most Valuable Philanthropist.

Finance graduate Deionte Jones, 22, grew up in Washington, in a household with a single mother. He's the first in his family to graduate from college, and he accrued about $25,000 in student loan debt after the academic scholarships he was able to secure. Jones said tears of joy filled his eyes when he heard Smith's news.

"It was a sense of a new start on life," Jones said. "It can be challenging to be an African American in this society because we sometimes don't come from strong economic backgrounds. This lifts a huge weight off my family's back."

Jason Allen Grant, 22, had been at the graduation site since before 6 a.m., he said, and was starting to get tired as the speeches wore on. Then he heard Smith say something about eliminating debt.

"It had been a long day," said Grant, who has about $45,000 in student loan debt. "When he said that, Oh my gosh, I perked up. My father almost passed out."

His father, who is a banking examiner at the Federal Reserve Bank of Cleveland, was planning to work another 10 years to pay off his son's college. Now, at age 57, he might walk in Monday and retire.

"I'm a third-generation college student and we're still having to pay loans," Grant said.

Class Salutatorian Robert James, 21, said he did not have student loan debt. Still, the business administration major said he has watched friends struggle financially through the years.

"A few of my friends have gone through difficulties, and knowing they will graduate and not have to struggle anymore is a really emotional moment," James said. "It's really liberating."

Thomas said the gift will open the door for students to follow their chosen career paths without being saddled by debt.

"It will allow them to more quickly go toward what they are passionate about," he said. "When you move toward what your passion is, you can make your greatest contribution to the world."

Smith said he wanted students to understand that part of receiving this gift is that they will also think about taking care of people behind them when they are able.

"Now, I know my class will make sure they pay this forward," said Smith, who received an honorary doctoral degree Sunday. "I want my class to look at these (alumni), these beautiful Morehouse brothers, and let's make sure every class has the same opportunity going forward, because we are enough to take care of our own community. We are enough to ensure we have all the opportunities of the American dream."

At the beginning of his speech, he said earning a college degree is one of the "greatest and most impressive" accomplishments in a person's life.

"But success has many parents," he continued. "And as hard as each of you has worked to achieve what you all have achieved today, you've had a lot of help along the way. We are the products of a community, a village, a team."

Smith talked briefly about his family, saying one of his daughters is graduating from New York University this week, another is finishing high school and will attend Barnard College in the fall, and his niece is graduating from his alma mater Cornell University next week.

He said that before he got in to private equity and made his fortune, he was a chemical engineer who "spent pretty much every waking hour in windowless labs, doing the work that helped me become an expert in my field."

That, he said, was the foundation for his success.

"Only after I put in the time to develop this expertise and the discipline of the scientific process that I was able to apply my knowledge beyond the lab," he said. "Greatness is born out of the grind. Embrace the grind."

He encouraged the graduates to enjoy their diplomas, and he impressed upon them the responsibility to do great things with them.

"The degree you earn today is one of the most elite credentials that America has to offer," he said. "But I don't want you to think of it as a document that hangs on a wall and reflects what you've accomplished up till now. No. That degree is a contract - a social contract - that calls on you to devote your talents and energies to honoring those legends on whose shoulders you and I stand."

Smith, who is chairman and CEO of Vista Equity Partners, a software and technology investment firm, is a famously private person and declined to be interviewed for this article.

He gave the grads some parting advice: "Whatever it takes, never, ever forget to call your mother. And I do mean call, don't text."

Smith's announcement comes after he had already pledged $1.5 million to the school in part for student scholarships and new park on campus.

Actress Angela Bassett also received an honorary degree in the ceremony.