After 168 years, Birmingham Southern College shutting its doors on May 31, 2024

Birmingham Southern College will be closing its doors on May 31, 2024Photo byAL.com

Birmingham-Southern College announced on Tuesday that it will be shutting down on May 31 after a difficult battle to secure a loan from the Alabama legislature.

“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.”

Representative Juandalynn Givan, a Democrat from Birmingham, is the elected representative for the Bush Hills community, which is located near the college. For over a year, she has been diligently working on creating legislation to provide much-needed support for the school. In an interview with AL.com on Tuesday morning, Givan stated that it is improbable for the revised loan bill to successfully pass through the House once legislators return from their 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.

During the previous winter, the small college, known for its private liberal arts education, made an announcement that, due to ongoing financial difficulties, it would require assistance from the state to continue operating. Initially, administrators requested $30 million from the state legislature, $5 million from the city, and also considered requesting $2.5 million from the county government. Throughout the legislative session of the previous year, college leaders collaborated with both local and state officials in efforts to prevent closure and attract new students. In June, Birmingham-Southern made known its intentions to keep the college open, citing positive developments from the legislature.

Several days later, Governor Kay Ivey approved a bill that would establish a fresh fund for struggling public and private universities. This program would provide a total of $30 million to sustain the operations of the school. However, during the fall season, school officials and legislators found themselves back to square one. The State Treasurer, Young Boozer III, who was in charge of the loan, rejected the school's application, citing that the school could not offer first-security interest in their assets, including their 192-acre campus. Boozer also stated that the college's financial plan for restructuring did not sufficiently address how the loan would be repaid. The college has refuted this claim. In October, the college filed a lawsuit against Boozer, but it was later dismissed by a judge. Now, in a last-ditch effort to keep the school running, lawmakers are proposing changes to the initial legislation. Senator Jabo Waggoner from Vestavia Hills, R, introduced SB31, which would transfer the management of the Distressed Institutions of Higher Education loan program from Boozer to Jim Purcell, the Executive Director of the Alabama Commission on Higher Education.

“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.

Last week, the Senate approved the bill with a vote of 22-5 and it has since been modified by a House committee. Despite this, Boozer has maintained his opposition to the bill. During a public hearing, Coleman, who has been the president of Birmingham-Southern for the past five years, assured the committee that the college would provide satisfactory collateral for a $30 million loan. This includes $15 million in U.S. Treasury bonds and the first priority claim on the college campus, which he stated is valued at $22 million if it were to be liquidated. Boozer, on the other hand, argued against the bill and proposed that SB31 should convert the loan program into a grant. He also disagreed with the adequacy of the proposed 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.”

On Tuesday morning, Givan expressed uncertainty about the possibility of the bill being brought to the floor upon the return of lawmakers next week. She acknowledged the challenge of persuading the 102-member House to remove Boozer's name from the program. Furthermore, Givan pointed out that the strained relationship between Boozer and the school's leaders has not made the situation any easier.

“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.”

The leaders of BSC stated that they had exhausted all possible avenues to acquire the loan. In recent discussions with House leaders, it was confirmed that the bill lacked sufficient support to progress. As a result, the college has decided to hold a board meeting on Tuesday to allow trustees enough time to examine their alternatives. In a letter to students on Tuesday afternoon, Thompson expressed that the potential closure of the school, which has had a significant economic impact on the state, would be devastating. He also added that it would be a sad day for Birmingham, the surrounding neighborhoods that have been part of the campus for over a century, and for the entire state of Alabama. The school is now making arrangements to assist students with their transfer plans. Seniors who are set to complete their degrees in the summer of 2024 will have the option to fulfill their course requirements either online or through partnerships 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.”

At this time, officials have stated that they plan to conduct individual meetings with current students and staff members to evaluate their choices. Following the Tuesday afternoon statement, Givan expressed that the closure was caused by a failure in communication between state and school leaders, as well as a lack of support from the local community. Nonetheless, she remains optimistic that the property will not remain empty for an extended period of time.