Birmingham-Southern College is suing the state treasurer after denying it a loan program that lawmakers promised would help save the university from going under, according to a lawsuit filed yesterday.
Alabama Gov. Kay Ivey in June signed into law the Distressed Institutions of Higher Learning Revolving Loan Fund Act, which would set struggling public and private universities into a loan program to rebound from their financial struggles. The program was initially funded at $30 million, with Birmingham-Southern in mind.
Birmingham-Southern nearly averted a closure in 2023 and has been struggling with enrollment since the pandemic. State offifcials projected in June that current fall enrollment would be 15% lower than usual. But thanks to private funding and conversations between the university and state legislators on an emergency loan program, the university stayed open for another year.
“This is the urgency of now,” said Rep. Juandalynn Givan, according to AL.com. “To lose Birmingham-Southern would be a travesty for all of us.”
However, Alabama State Treasurer Young Boozer denied Birmingham-Southern the loan even though the institution had promptly applied for it, according to the lawsuit. While Alabama institutions are not guaranteed the loan, university officials stated they were well within its qualifications.
Birmingham-Southern then filed the lawsuit to compel Boozer to accept its application and execute the loan.
“BSC President Daniel Coleman said that although the college has engaged in good faith discussions with Boozer for several months, unfortunately, our good faith has been betrayed,” a press release from Birmingham-Southern stated. “After several additional attempts over the last two weeks and up through today to get Treasurer Boozer to execute the will of the Alabama Legislature, we have no other choice but to seek remedy from the court.”
A hearing was set today in Montgomery County Circuit Court.
Birmingham-Southern’s direct economic impact in 2022 was $97.2 million, $70.5 million of which was in Jefferson County where the school is located, according to an economic impact study by Economic Research Services. It also found that facility and student spending totaled $52.9 million that same year.