On May 12, 2022, Snap CEO and cofounder Evan Spiegel and his wife, Miranda Kerr, founder of beauty brand KORA Organics, delivered an astonishing message to the graduating class of Otis College of Art and Design in Los Angeles: Through a private donation to the school, the couple would be paying off the entire student loan debt of all 285 graduates.
Neither the college nor Spiegel disclosed the exact dollar amount donated, but the college said it was the largest single gift it ever received, surpassing the previous record of $10 million. In California alone, over 3.8 million student loan borrowers collectively owe nearly $150 billion. The total U.S. student loan debt stands at $1.76 trillion.
“Otis College of Art and Design is an extraordinary institution that encourages young creatives to find their artistic voices and thrive in a variety of industries and careers,” Spiegel and Kerr—who both received honorary Otis degrees—said that day. “It is a privilege for our family to give back and support the class of 2022, and we hope this gift will empower graduates to pursue their passions, contribute to the world, and inspire humanity for years to come.”
Spiegel, a Stanford graduate, attended classes at Otis while in high school, which he says were formative to his career. “[Otis] changed my life and made me feel at home,” Spiegel said. “I felt pushed and challenged to grow surrounded by super talented artists and designers, and we were all in it together.”
The gift would be “life-changing” for many of the graduates, Charles Hirschhorn, the president of Otis College, said in a statement last May, adding that student debt “weighs heavily” on its student body—over 90% of students at Otis receive financial aid.
“We hope this donation will provide much-deserved relief and empower them to pursue their aspirations and careers, pay this generosity forward, and become the next leaders of our community,” Hirschhorn said. (Otis College did not respond in time to Fortune’s request for comment.)
While the ripple effect of Spiegel and Kerr’s gift will take decades to bear out, one thing is certain: The graduates have all shared in “much-deserved relief” in spades. Fortune spoke with three members of the Otis College class of 2022, all of whom erupted into shrieks and tears of disbelief on their graduation day and now often think about their good fortune—and the raw deal the classes before and after them got.
The graduates discussed the dent the gift made in their finances and how the shape of their lives has changed in the 12 months since they heard the unfathomable good news.
Farhan Fallahifiroozi, 23: It helped me buy a house
Farhan Fallahifiroozi, a 23-year-old who studied fashion design at Otis, says he didn’t understand just how great the news was until he started his postgrad job as an assistant designer at bridal gown retailer Watters, where he works with people who have been paying down their loans for 20 to 30 years.
“It’s such a relief. I can put my money aside and use it on something else,” he says. That something else ended up being monumental; six months after graduation, he bought his parents a house in Dallas.
“I only needed to put down 3%, and we were already paying rent, so I thought, ‘Why not put it toward something that could be ours in the end?’” explains Fallahifiroozi, who lives with his family.
The experience, he says, has opened his eyes to the absurdity of the cost of education and made him more curious about how money works. He’s gone down a rabbit hole to learn more about business and money, setting him on a path “to have plans, set goals, and hopefully get out of this rat race.” While he loves his nine-to-five, he adds, it’s not what he wants to do forever.
Right now, Fallahifiroozi says, his freedom and choice stem from his lack of financial struggles. He says he currently has around three months’ worth of savings—an unthinkable amount, had he been shouldering loans.
“If I had that responsibility, I think it would control a lot of my decisions,” he says.
Meka Tome, 24: It allowed me to pursue an art career
Meka Tome compares Spiegel’s gift to winning the lottery. Without it, she says, her loans would have numbered in the hundreds of thousands. “I can’t even fathom how much time that would’ve taken to pay off,” she adds.
Just the weight of knowing that you would have to pay off loans is paralyzing in and of itself, she says. “The act of doing so is a million times worse.”
Tome graduated from Otis with a BFA in sculpture and new genres. Heading into graduation, she assumed she’d be setting art aside to work full-time in a better-paying field that would help her pay off her loans.
Now she lives in Los Angeles, working at her alma mater as a photo lab technician and freelancing as a photographer. She’s even considering a master’s program.
By making her artistic aspirations suddenly tangible, the gift has given her a chance to believe in herself, she says. Her family never thought anything much would come of the degree she earned, she says, but they’ve come to see it as a valid pursuit now that it’s not such a financial undertaking.
“Being an artist is not the easiest thing to pursue, so I think the hope it’s given all of us is really just—I can’t even put it into words. It’s unparalleled,” she says.
Not for nothing, she adds, Otis is a really expensive school. “All of us who really needed help financially can actually exist in the world as ourselves now,” she says. “Art students in particular are really determined to change the world in the way they know how, and that can span across everything.”
Ashley Alarcon, 22: It afforded me the opportunity to save up for my own company one day
Like many Otis students, Ashley Alarcon was the first in her family to attend college. The private school tuition was a challenging cost to incur for her family, the fashion design major recalls.
At Otis, she says, students become eligible for scholarships as their education progresses. So she had to take out the cost of her entire tuition in loans her freshman year before receiving two scholarships to help shore up the differences.
When she received a job offer to be an assistant designer for the women’s apparel team at Levi Strauss shortly before graduation, she felt relieved she would be able to start paying off her loan as soon as she graduated. When Spiegel’s gift was announced during graduation, she was shell-shocked.
The first thing she realized was that her soon-to-be salary would be her money, to budget however she chooses, rather than to first and foremost to repay the loan. “It was such a relief,” she says.
Alarcon currently lives in an apartment in San Francisco with another Otis ’22 grad from her program, who also had significant debt—without which they don’t believe they’d be able to afford living out of their homes. “We’re completely comfortable for the age we’re at. We can pay rent, we eat well, we’re just very thankful,” she says.
Starting off immediately stable has propelled her further down the line than if she’d started with debt, she says. Her end goal is to found her own brand, which would be another amount of debt to incur.
“But the fact that I can build it up now, and save, and just budget differently, is super helpful in helping me be more career-driven and more confident,” she says. “Mostly because I’m already at a level I thought I wouldn’t be at for another few years.”
