Alabama lawmakers still considering Birmingham-Southern loan

A bill intended to provide Birmingham-Southern College a $30 million state loan is up for discussion Tuesday in an Alabama House committee.

SB31, by Sen. Jabo Waggoner, R-Vestavia Hills, would move control of the Distressed Institutions of Higher Education loan program from State Treasurer Young Boozer to Alabama Commission on Higher Education Executive Director Jim Purcell.

Boozer denied Birmingham-Southern’s loan application last year, finding that the college did not meet the requirements set under the loan program, including adequate collateral and an adequate financial restructuring plan. The college disputed Boozer’s decision.

Waggoner’s bill would make other changes to the program that appear to make it more likely Birmingham-Southern will receive the money.

The Legislature created the loan program last year in response to Birmingham-Southern’s request for state assistance. The private, liberal arts college has said it is likely to close without the state funds. The state loan would be a bridge while it works to raise $150 million to $200 million for a private endowment that would sustain operations, college officials say.

Birmingham-Southern said it has received pledges of $46 million toward the fundraising effort. The college has an enrollment of 689 students this semester.

Two weeks ago, the Senate passed Waggoner’s bill by a vote of 23-5. The House education budget committee will hold the public hearing Tuesday.