Alabama House committee OKs repeal of Birmingham-Southern College loan program

An Alabama House committee Wednesday approved a bill to end a program that would have extended a financial lifeline to Birmingham-Southern College. 

HB 415, sponsored by Rep. Juandalynn Givan, D-Birmingham, repeals the Distressed Institutions of Higher Education Revolving Loan Program. The program was created in the 2023 regular legislative session as a way for the state to provide funding to Birmingham-Southern College, which was in financial distress.

But the funding depended on the State Treasurer Young Boozer approving the loan, estimated at about $30 million. Boozer last year refused to do so, citing concerns about the long-term health of BSC.

Sen. Jabo Waggoner, R-Vestavia Hills, who sponsored the 2023 legislation, sponsored a bill this year to get the money to BSC and remove Boozer from the process, but the legislation failed to advance out of a House committee. Birmingham-Southern College cited the failure of the bill as a key reason for their scheduled closure in May.

“It will provide that any funds in the Distressed Institutions of Higher Education Loan Program Fund be transferred back to the Education Trust Fund (ETF) within 30 days,” she said.

The legislation passed on a voice vote out of the House Ways and Means Education committee. 

The House on Tuesday approved  a supplemental funding bill for this year’s education budget that distributes about $15 million of the money that would have gone to BSC to the K-12 Capital Grant Program, a fund in the lieutenant governor’s office that pays for “capital projects, deferred maintenance, or technology needs” subject to the approval of individual representatives or senators. 

The loan program is currently set to expire Jan. 18, 2027, which corresponds to the end of Boozer’s end of term as state treasurer.

The bill moves to the full House. The bill needs four days to pass; there are seven days left in the legislative session.