New bill would create loan program for financially struggling colleges; could help save Birmingham-Southern College
Last year, the school said it would have to close if it did not get 37 million dollars in funding, asking the state for about 30 million. Birmingham-Southern College leaders have been working to raise millions of dollars on their own for months, and it wasn’t until last month that they told students they had enough money to stay open. At that time, officials were hinting about a new bill that would create a loan program to help them. That bill was introduced to the Senate committee on May 3rd, where it passed unanimously.
“You don’t just turn your back and allow it to close,” Sen. Jabo Waggoner said.
Bill sponsor, Senator Jabo Waggoner is calling it the Birmingham-Southern Bill.
“They have a financial hardship created by a president of the college, several presidents ago, no one recently,” Waggoner said. “He spent a lot of unnecessary funds, of college resources, and it put them into this financial problem. Now, we are having to try and bail it out.”
Unanimously approved by committee, the bill creates a loan program for any public or private college or university in the state, but they have to meet certain criteria.
“They have been operating for more than fifty years in Alabama,” Waggoner said. “They have a significant impact on the community. It is experiencing financial hardship, leading to a closure of the institution. It also has to have assets sufficient to pledge as collateral. Birmingham-Southern probably does, because of the 200 acre campus and many buildings.”
The loan program would be called “The Distressed Institutions of Higher Education Revolving Loan Program Fund.” If enacted, it doesn’t have any specific details about funding, but Waggoner said it will be given out by the state treasurer. He said Birmingham-Southern will likely need 30 million to stay open.
“We are going to put this bill on what we call the fast track,” Waggoner said. “This legislation will probably save Birmingham-Southern College. It is very well respected in this community and it’s an institution we have to keep alive and functioning in Birmingham and in the state of Alabama.”
Waggoner said he thinks the bill will likely pass next week. House representatives introduced a similar bill to the House this week.
WBRC reached out to Birmingham Southern-College, but they declined to comment.
Click here to read the full bill.
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