After a long fight for a loan from the Alabama legislature, Birmingham-Southern College announced Tuesday that it will close its doors on May 31.
“The Board of Trustees voted unanimously today to close the College after a 2024 bill designed to amend the 2023 legislation that established the loan program on which our future depended failed to win sufficient support in the Alabama House of Representatives. Without that funding, the College does not have the resources to continue,” a letter from the Rev. Keith D. Thompson, the chair of BSC Board of Trustees, states.
“This is a tragic day for the College, our students, our employees, and our alumni, and an outcome so many have worked tirelessly to prevent. We understand the devastating impact this has on each of you, and we will now direct our efforts toward ensuring the smoothest possible transition for everyone involved.”
Rep. Juandalynn Givan, D-Birmingham, represents the Bush Hills area near the college and, for more than a year now, has worked on legislation to help give the school a lifeline. She told AL.com Tuesday morning that it was unlikely that a revised loan bill will pass through the House when lawmakers come back from spring break next week.
“If they had to vote on the bill today, I can honestly tell you they would not have the votes in the House,” she said.
The small, private liberal arts college announced last winter that, after years of financial troubles, it would need support from the state to stay open. Officials initially asked for $30 million in funding from the state legislature, $5 million from the city and considered a $2.5 million request from the county government.
Throughout last year’s legislative session, leaders worked with local and state officials to stave off closure -- and recruit new students. In April, Birmingham-Southern announced plans to keep the college open, citing “encouraging” news from the legislature.
A few months later, Gov. Kay Ivey signed a bill that would create a new loan program for struggling public and private universities. The program would provide just enough money, $30 million, to keep the school running.
But by the fall, school officials and lawmakers were back at square one.
More: Birmingham-Southern College
State Treasurer Young Boozer III, the loan administrator, had denied the school’s application, claiming the school could not provide first-security interest in its collateral assets, which include its 192-acre campus. Boozer also said the college’s financial restructuring plan did not adequately provide for repayment of the loan. The college has disputed that.
The college sued Boozer in October. A judge later dismissed the suit.
Now, in a final attempt to keep the school’s doors open, lawmakers are seeking to make changes to the original legislation.
SB31, by Sen. Jabo Waggoner, R-Vestavia Hills, would move control of the Distressed Institutions of Higher Education loan program from Boozer to Alabama Commission on Higher Education Executive Director Jim Purcell.
“If we don’t get this done and get it done in a timely manner, then the school will close,” Sen. Rodger Smitherman, D-Birmingham, said on the Senate floor in early March.
The bill passed the Senate on a 22-5 vote and recently moved out of a House committee with a few changes. Meanwhile, Boozer has continued to voice his opposition.
In a public hearing last week, Coleman, president of Birmingham-Southern for the last five years, told the committee the college would offer adequate collateral for a $30 million loan, including $15 million in U.S. Treasuries and first-priority claim on the college campus, which he said has a liquidation value of $22 million.
Boozer, speaking later, told the committee SB31 would change the loan program to a grant. He disputed that it provided for adequate collateral to protect the state funds.
“My warning to this committee, the public, and especially to taxpayers, if you loan it, you will own it,” Boozer said. “It is a falling knife.”
Givan said Tuesday morning that she wasn’t sure if the bill will even hit the floor when lawmakers return next week. It will be difficult to convince the 102-member House to strike Boozer’s name from the program, she said. And the tumultuous relationship between Boozer and the school’s leaders, Givan added, has not helped.
“Many of them feel that that move was really a slap in the face to the state, to the process,” she said, adding a moment later: “I would be surprised, even if this bill passes, if the governor signed off on it.”
What’s next?
BSC leaders said they exhausted every option to obtain the loan, and in recent conversations with House leadership, confirmed that the bill did not have enough support to move forward. The college decided to schedule a board meeting Tuesday to ensure that trustees could have time to review all of their options.
In a letter to students Tuesday afternoon, Thompson said the loss of the school -- which he said has brought millions of dollars of economic impact to the state, was “incalculable.”
“It is also a terrible day for Birmingham, for the neighborhoods who have surrounded our campus for more than 100 years, and for Alabama.
The school is now planning to help students with their transfer plans. Seniors who plan to complete their degrees in the summer of 2024 will be able to finish their course requirements online or through agreements with other institutions.
“We are putting students first, and we will do everything we can to help them find the best place to continue their path to graduation,” said Provost Dr. Laura K. Stultz.
“We are working with other institutions – including those in the Associated Colleges of the South as well as some in-state colleges and universities -- on agreements that will help maximize the transfer of credits to keep them on track.”
In the meantime, leaders say they will hold individual meetings for current students and employees to assess their options.
Givan, after the announcement Tuesday afternoon, said the closure was a result of a breakdown of communication between state and school leaders, and a lack of local support. She is confident, however, that the property will not stay vacant for long.
“It is a loss for the community, it’s a loss from many different standpoints,” she said.
This story was updated to reflect that Birmingham-Southern never made a formal request for funding from the Jefferson County Commission.