Alabama House committee approves Birmingham-Southern College loan bill

A photo of Birmingham-Southern College's campus. (Birmingham-Southern College Communications Department)

An Alabama House committee Wednesday approved a bill aimed at extending a financial lifeline to Birmingham-Southern College, but not before adopting some significant amendments to the legislation.

SB 31, sponsored by Sen. Jabo Waggoner, R-Vestavia Hills, makes changes to the Distressed Institutions of Higher Education Revolving Loan Program, a law enacted last year to shore up BSC, a small liberal arts college struggling with declining enrollment and a shrinking endowment. 

Waggoner filed the bill after State Treasurer Young Boozer, put in charge of the program under the 2023 law, declined to provide a loan to the school, citing uncertainty about its long-term health. 

SB 31 would, among other changes, move the administration of the program to the executive director of the Alabama Commission on Higher Education from the state treasurer. It would also effectively guarantee that a loan was issued.

The House Ways and Means Education Committee adopted a substitute and amendment from Rep. David Faulkner, R-Mountain Brook, both of which were first introduced at a Tuesday public hearing. Faulkner’s changes included requirements that the school meet benchmarks for enrollment and paying down debt to keep the loan in good standing. It also prevents an educational institution from getting more than one loan. 

Rep. Cynthia Almond, R-Tuscaloosa, brought an amendment that said that a county, municipality or combination would need to supply an additional 15% of whatever loan came from the state.

“I would say the point of the amendment is to require local skin in the game,” she said.

Rep. Barbara Drummond, D-Mobile, asked what that could mean for counties without that funding.

“I’d hate for us to put an unfunded mandate on a particular entity because many of our over 100-year-old institutions are located in struggling, poverty-stricken areas,” she said. “So how do we account for that?” 

Rep. Debbie Wood, R-Valley, asked if local governments could provide the 15% as in-kind services, but Almond said it would be limited to funding. 

Rep. Terri Collins, R-Decatur, brought an amendment that would require qualifying institutions to be in existence for 100 years, up from the 50 years in the bill.

“I think that was what we were talking about, was those that have a longstanding heritage and that we would then want to support those,” she said.

House Minority Leader Anthony Daniels, D-Huntsville, said the bill would cut out University of South Alabama, founded in 1963, which led to objections from Drummond.

“I’m sure Rep. Daniels did that because he knew it would get me started,” she said.

Drummond said after the meeting that she wanted University of South Alabama to be able to access the program it it found itself in need.  

In committee, Rep. Danny Garrett, R-Trussville, the committee chair, noted that the University of South Alabama is a public institution, not a private one like BSC.  Drummond said afterwards that “distressed” was the key word.

“I think distressed is what distressed is,” she said.

The amendment was passed  7-6, with one abstention on a second vote.

The legislation moves to the House floor, but not everyone believes it will receive final passage. Rep. Juandalynn Givan, D-Birmingham, who represents the district where Birmingham-Southern College is located, wrote in a text afterwards that the bill had a difficult time last year in its original form.

“I just don’t believe that the bill is going to have a shot in getting off the floor,” she wrote.

The post Alabama House committee approves Birmingham-Southern College loan bill appeared first on Alabama Reflector.