Facing the possibility of closure and recently denied a state loan, Birmingham-Southern College officials have received a temporary reprieve in the form of a $5 million loan from the Birmingham, Ala., City Council, al.com reported.
The loan will help keep the private college afloat, likely allowing it to remain open for fall 2024; uncertainty about BSC’s future has swirled since December.
The $5 million lifeline is packaged as two loans, al.com reported, each for $2.5 million. The first loan will be forgiven on the condition that BSC reopens and offers classes in fall 2024. The second, secured by campus assets, will be repaid over the course of 20 years. BSC officials are seeking a similar financial support package from the Jefferson County Commission.
Since December, BSC has sought support from public entities, including the Alabama Legislature, which in August crafted a loan program for distressed private colleges. The legislation, written by a BSC graduate, established a loan program for $30 million, the amount college officials initially said they needed to stay open. However, state treasurer Young Boozer III denied BSC’s application for the needed loan, which came as a surprise to college officials.
BSC sued Boozer last month in an unsuccessful attempt to force him to disburse the loan. Now BSC may have another opportunity to secure the funds if it can stay open long enough for Alabama’s Legislature to craft a solution to allow access to the loan program.
State lawmakers have indicated a willingness to revamp the loan program, limiting Boozer’s authority to deny and approve loans in the next legislative session, which begins in February.