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A county judge has dismissed a lawsuit brought by Birmingham-Southern College against Alabama state treasurer Young Boozer III for denying its application for a public loan, even though the loan seemed tailored for the struggling private institution after it announced it would likely close without state aid.

The college sued Boozer earlier this month after he denied its application for a $27 million loan. The Alabama Legislature established the loan program for private colleges earlier this year, with a Birmingham-Southern graduate crafting the legislation. But after the program was established, BSC was denied the loan in what officials called an unexpected move. College leaders have since accused Boozer of undermining the Legislature and acting in bad faith.

On Wednesday, BSC’s lawsuit seeking disbursement of the funds was dismissed.

“We are disappointed with this ruling and are exploring our options, which may include an appeal to the Alabama Supreme Court with a request for an expedited briefing,” Birmingham-Southern president Daniel Coleman said in a statement. “While the Alabama Constitution provides for immunity to state officials, such immunity should not apply to those who act arbitrarily or capriciously, or in bad faith, or who have misinterpreted the law in question.”

BSC’s lawsuit indicated that the institution faces the risk of immediate closure without the expected aid.