The school received a "significant donation" from the couple that "will allow for the repayment of the outstanding student debt of students in the graduating Class of 2022," Otis said in a statement.
The donation, made through the Spiegel Family Fund, is the largest single gift in the school's history.
"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, 31, and Kerr, 39, said in the statement.
"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," they continued.
Students received the news during Otis College's 2022 commencement on Sunday (the big moment can be viewed here around the 3:23:00 mark).
Kerr, CEO of beauty brand KORA Organics, and Spiegel both received honorary degrees from the school during the ceremony. (Spiegel took classes at Otis while in high school and later graduated from Stanford University.)
"Otis is incredibly grateful for this historic gift from Miranda Kerr and Evan Spiegel, which will be life-changing for the Class of 2022 and their families," Charles Hirschhorn, President of Otis College, said.
According to the Los Angeles Times, approximately 285 students graduated from Otis this year.
"Student debt weighs heavily on our diverse and talented graduates. 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 added.
Student loan debt surpassed $1.7 trillion in the U.S. in February 2021, Forbes reported.
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Spiegel, the CEO of Snap Inc., is worth more than $5.2 billion, according to the Bloomberg Billionaire's Index.