The Birmingham City Council approved a $5 million loan for Birmingham-Southern College on Tuesday that will help fund operations at the private school for the near future.
The Council approved a $2.5 million loan at 10% interest that will be forgiven when BSC opens for the fall 2024 semester and another $2.5 million loan to be repaid over 20 years at a 1% interest rate.
"We are deeply grateful to the Birmingham City Council for approving this investment, and to Mayor Randall Woodfin for putting together the economic development package that not only documents our current value to the city, but also the value BSC will continue to bring as we build out our masters' programs in data science, computer science, cybersecurity and information systems over the next four to five years," BSC President Daniel Coleman said.
The City's commitment initiates an additional $2.5 million investment from the United Methodist Church's North Alabama Conference Board of Pension and Health Benefits, announced on November 9 and was contingent upon the city's participation of up to $5 million.
"These funds provide us the time we need as we continue to work with elected officials to obtain the bridge funding that has already been set aside by the Alabama Legislature, and to continue to secure endowment funding from private sources, "Coleman said.
Coleman said BSC will begin awarding up to three full-tuition scholarships annually to graduating seniors of Birmingham City Schools who have applied and been accepted prior to the published application dates. The scholarships are designed to support high-achieving graduates of Birmingham City Schools. When paired with eligible state and federal grants, tuition for these students will be fully funded.
BSC, a private school, is financially troubled due to missteps by the College's administration in previous years and declining enrollment. Alabama State Treasurer Young Boozer recently denied a $30 million state loan to bail the private school out.
Legislators passed the Distressed Institutions of Higher Education Revolving Loan Program and appropriated $30 million in the 2023 legislative session. The Alabama State Treasurer's Office administers the program.
Montgomery County Circuit Judge James Anderson dismissed a lawsuit recently filed by BSC against Boozer for the loan denial.
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