Birmingham-Southern could get second chance at state bailout

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Dive Brief:

  • Alabama lawmakers filed a bill Tuesday that would replace the administrator of a loan program set up to help the financially struggling Birmingham-Southern College after the official denied the private institution’s application last year for a $30 million bailout.
  • The bill could revive Birmingham-Southern College’s chances of receiving a loan from the state. The college’s president, Daniel Coleman, praised the changes Wednesday and urged community members to contact state legislators in support of the bill.
  • Under the proposal, the leader of the Alabama Commission on Higher Education would administer the loan — not State Treasurer Young Boozer. Neither Boozer nor the higher education commission immediately responded to a request for comment Wednesday.

Dive Insight:

Birmingham-Southern’s leadership has stated the institution risks closing without an infusion of government cash. At the end of 2022, the college announced it was seeking $37.5 million in federal, state, county and city assistance.

For much of last year, the Alabama Legislature seemed poised to help. Lawmakers approved the creation of the loan program for distressed colleges like Birmingham-Southern and allocated the fund with $30 million, the amount the institution requested from the state.

But Boozer denied the college’s loan application in October, setting off a messy fight.

Shortly after the decision, the college sued Boozer to force his approval of the loan, but a circuit court judge dismissed its case.

After the court decision, Coleman accused Boozer of taking “arbitrary and capricious” action. In turn, Boozer said Coleman was trying to “deflect blame and attack” his character. He also called the college a “terrible credit risk.”

Now, a proposed change to the loan program could remove Boozer as a barrier by replacing him with the state higher education commission’s executive director, Jim Purcell, who has spoken well of Birmingham-Southern in the past. The bill would tighten the language around Purcell’s role, limiting how much discretion he has over approving loans.

The proposal also would also make changes to collateral requirements — a point of contention between Boozer and the college — and it would require borrowers to repay loans made under the program within 20 years.

“While the bill makes its way through this process, we will press for a speedy resolution to the uncertainty that all of you have endured since the State Treasurer’s October decision to deny BSC these funds,” Coleman said in a statement.

Sen. J.T. Waggoner, a Republican who introduced the bill, and Birmingham Mayor Randall Woodfin did not immediately respond to a request for comment Wednesday.

So far, Birmingham-Southern has raised at least $7.5 million from other sources, including a loan from the Birmingham City Council. Woodfin this week urged state lawmakers to update legislation so the college could receive a loan, according to

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