MONTGOMERY – A bill that would make another attempt at getting a $30 million loan to Birmingham-Southern College (BSC) passed the Senate Education Budget Committee on Wednesday.

Legislation filed by State Sen. Jabo Waggoner (R-Vestavia Hills) would replace Alabama State Treasurer Young Boozer as the administrator of a $30 million loan program designed to bail out BSC.

Under the bill, Dr. Jim Purcell, executive director of the Alabama Commission on Higher Education, would administer the state loan to BSC, a financially beleaguered private school.

"There is several hundred applicants waiting for this to pass to decide if they have a college to go to. There’s a lot of students that have applied waiting on this bill to become law where they can go to school. It’s not ready to shut down okay, if this passes," Waggoner said.

Boozer denied a $30 million state loan to bail the private school out last year after legislators passed the Distressed Institutions of Higher Education Revolving Loan Program and appropriated $30 million in the 2023 legislative session for BSC. The Alabama State Treasurer's Office administers the program under the current version of the law.

Montgomery County Circuit Judge James Anderson dismissed a lawsuit filed by BSC in October against Boozer after he denied the loan.

The new version of the legislation appears to remove any previous discretion given to the loan fund administrator regarding whether to award the loan. The law passed in the last session said the "State Treasurer may award a loan," while the new bill filed on Tuesday says the "Executive Director of the Alabama Commission on Higher Education shall award a loan."

College officials have said BSC is in danger of shutting down if they don't receive the state loan.

"I believe this step here is bad policy. I love my guys, love Birmingham-Southern but I just don’t think this is the right step for the state," State Sen. Greg Albritton (R-Atmore) said before voting against the bill.

Education Budget Chair State Sen. Arthur Orr (R-Decatur) said at the committee, “My question is: who’s next?” 

“What institution out there that might be in financial straits will be next and would in my opinion need to be treated similarly and if this bill passes we’re going to have trouble distinguishing from future colleges that may come in a financial distress situation,” he continued. “The new bill to me brings a lot more to the table that gives me pause. I voted for the last bill and thought we had done a good job to cast a lifeline to the institution. It’s unfortunate that it didn’t work out.”

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