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Alabama Gov. Signs Bill to Keep Birmingham Southern College Open With $30 Million Loan


By Rebecca Griesbach | rgriesbach@al.com

A highly anticipated bill that could save Birmingham-Southern College, as well as other struggling Alabama universities, was signed into law Friday.

The law creates a new loan program for struggling public and private universities through 2027. Colleges could apply for temporary public funds through the state treasurer, so long as they submitted a plan to repay the money. The program is initially funded with $30 million, which is expected to go to the small liberal arts college in Birmingham.

The legislature has offered some support to private colleges, but the unique effort would allow any Alabama college to apply for financial assistance. Birmingham-Southern was on the brink of closure six months ago, but may now be able to get back on its feet.

The school currently is recruiting an incoming class of freshmen for another school year in August, which they project to be about 15% lower than usual. BSC officials said they heard Friday morning that the bill had been signed, and now expect enrollment to grow.

“We thought she would sign and we’re very grateful she did,” BSC President Daniel Coleman told AL.com Friday. “We look forward to working with Treasurer Boozer to make sure this package has the maximum impact for us and protects the taxpayers of Alabama.”

Friday was the last day that the governor could sign the bill, or else it would have been “pocket vetoed.” In March, Gov. Kay Ivey said she didn’t intend to support state funds for the college, but she has since worked with legislators to add more guardrails to the loan program.

Rep. Juandalynn Givan, D-Birmingham, who represents the Bush Hills neighborhood where the college is located, worked on the bipartisan legislation with Jefferson County lawmakers Rep. Jabo Waggoner, R-Trussville and Rep. Rodger Smitherman, D-Birmingham.

Givan, the law’s co-sponsor, said she was told by the governor’s office Friday that the bill had been signed. It would have been rare, she said, for the governor to veto legislation that she had already reviewed and tweaked.

“I’m very proud of my work on this effort,” Givan told AL.com. “I kept my promise to the Bush Hills Community and to District 60, not to allow under my watch an institution of higher learning close. The distressed institution bill is one that could prove to be quite beneficial in the future if there is ever a need for assistance from any of our fine colleges or universities.”

Coleman said the college will meet with the city of Birmingham soon, as well as the county, to discuss other local funding options. Leaders say they have already been able to raise about $46 million toward their $200 million endowment goal.

In the meantime, the school is still working to grow enrollment and adjusting to the loss of faculty, some of whom left out of concern that the school would close. But leaders say the school will still be able to maintain small class sizes, and give students a quality experience this fall.

“We had near-record applications before all of this,” Coleman said. “And we do think Birmingham-Southern is the type of college that a lot of young people would like to go to, so we’re optimistic we can turn this.”

In order to apply for the loan, colleges must meet the following criteria:

–The college must have been in operation for more than 50 years in Alabama

–Have a significant impact on the local community

–Be at risk of closure due to financial hardship

–Must maintain operations and have a plan to fundraise as it receives the loan

–Have assets that it can pledge as collateral if it is unable to pay back the loan

An amendment from the governor also requires applicants to submit a written financial plan documenting their ability to repay the loan. Recipients will also be required to pay interest on loans, and will not receive funds if they can’t prove that they have taken steps toward “financial soundness.”

The loan program will sunset after the current term of the state treasurer ends, unless lawmakers vote to extend the program.