Cash

Why Cash Is Still King On Graduation Day

Why Cash Is Still King On Graduation Day

For the last several weeks, and for a few more to come, students at the nation’s high schools and colleges are donning their gowns and mortarboards and collecting their diplomas. For many of those getting university degrees, the day comes with mixed emotions, because the real world has finally come to call.

Finding a job, being solely responsible for one’s own household provisions and making student loan payments are about to become first-time features of many lives. Being too hungover to get up might justify skipping a 300-person lecture class, but – as one quickly learns as an adult – it will get one fired from a job pretty quickly.

But before all the complications of adult life start to settle in, there is that last big graduation party where graduates and their families celebrate. According to the National Retail Foundation (NRF), Americans are on track to spend $5.2 billion on graduation and graduation-related gifts this year – the third highest amount since the NRF started keeping track 12 years ago.

The majority of that spending will be on gifts aimed at “helping students with the costly transition from high school to college or college to the ‘real world,’ according to the NRF.

And while most of those gifts you could probably guess without reading the rest of this article, we’re betting there are probably a few that would take almost any graduate, no matter how cynical, by surprise.

Graduation By the Numbers

When it comes to graduation gift-giving, it’s all about the Benjamins. Well, if the grad is lucky, anyway – plenty of Grants, Jacksons, Lincolns and a few Washingtons are generally also in the mix. About 55 percent of gift givers report handing over cash, and about 43 percent put it in a greeting card first.

But just because cash is king on graduation day doesn’t mean there aren’t other options, which retailers are hustling to fulfill.

“Graduation is a huge milestone for students and parents alike, and retailers are ready to help make it even more memorable,” said NRF President and CEO Matthew Shay. “Cash might be the most popular item, but an assortment of graduation gifts, from greeting cards and gift cards to clothing and electronics, will tempt shoppers.”

Making a particularly strong showing this year are gift cards, electronics and apparel, which clocked in at 32 percent, 14 percent and 10 percent, respectively.

The most surprising data from the NRF study isn’t really about what people are buying, but who is doing the buying. The usual suspects – parents, grandparents, mentors and other family – lead the pack as usual; peers are increasingly likely to purchase graduation gifts for each other. The NRF found that 45 percent of those aged 18-24 plan to give a gift to graduates, though they are the lowest-spending group, averaging $73.87. Grandparents do a better on the gift-giving front, spending an average of $107.13.

But the biggest spenders are usually Mom and Dad – or those aged 45-55 – who spend, on average, $119.86 on the graduation. Of course, the parents are getting the biggest gift back, with their graduate moving off the household payroll.

And, of course, those are just averages. Some gifts go way, way above average.

The Hands-Down Winner for Best Graduation Gift in 2019

Generally, graduations are like Christmas: It is almost impossible to determine the best gift given. What really makes something the best gift, anyway? Is it the most expensive? The most meaningful? The most beautiful? The rarest? The cutest puppy with a bow on its head?

But once in a while, there is a year with a clear winner – and 2019 was one of those years.

Billionaire Robert F. Smith took the best 2019 graduation gift, and probably the most memorable commencement address in human history, with his announcement last month that he would be picking up all student loan bills for the entire Morehouse College graduating class of 2019.

“This is my class, and I know my class will pay this forward,” Smith said when he announced the news.

Prior to the announcement, only Smith and his immediate family knew about the planned grant gift – college officials and Smith’s staff reported being caught completely off guard. The gift has been estimated to be worth up to $40 million.

Needless to say, it was received with great cheer and joy.

“If I could do a backflip, I would. I am deeply ecstatic,” Elijah Dormeus, a business administration major, told the Atlanta Journal-Constitution.  Dormeus is graduating with $90,000 of debt, he is one of five children and his mother is a Harlem school bus driver. He told the AJC he had intended to be paying off student loans “for the rest of my natural life, I guess.”

Morehouse has confirmed it was the single largest gift in the school’s history.

In his commencement address, Smith told students that success was only as good as their capability to share it, comparing being successful to driving a bus: “You want to own it, you want to drive it and you want to pick up as many people as you can along the way.”

He went on to charge the class of 2019 with doing its part to improve the lives of others. “I’m putting some fuel into your bus, “ he said. “I’m counting on you to load up that bus.”

Based on early reports, the recently gifted grads are planning to do as they were asked, and will pay their massive graduation gift forward. Fulbright scholar Jonathan Epps noted the grant will make it possible for him to attend law school and pursue public service and civil rights law.

“I knew I would have to take out more loans on top of the loan I had to take coming out of undergrad,” Epps said in an interview. “With one gesture, Robert F. Smith really changed everything for me and my future. It was a revolutionary gesture by him.”

Graduate Joshua Reed didn’t have any student debt to pay back, as he attended Morehouse on a scholarship. But, he noted, the gift has resonated through the school so powerfully that he plans to pay the generosity forward, even though he was not a direct beneficiary.

“My friends have already made a pledge to raise $100,000 by age 32. I think across the board, all of us are going to do something, and I am included in that number,” Reed said.

How exactly the gift will be distributed to students (and their creditors) has not yet been announced, though Smith’s staff has confirmed it will be resolved by the time the student’s first payments are due around October.

So, what is the lesson in graduate gifting?

Well, there is the obvious observation that cash is king – and the more, the better when one has a several thousand dollars in student loans to pay. But there is also the less observable lesson that at graduation, as at most other times, it really is the thought that counts, particularly when the thought is about helping someone build a brighter future.

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