Losing Birmingham-Southern College ‘would be a travesty’, say lawmakers as they seek $30m bailout

Jabo Wagoner said Alabama and Birmingham need Birmingham-South “alive and healthy.”

He and other state lawmakers from the Jefferson County delegation are proposing a plan to spend $30 million from the U.S. bailout and money from the state’s Education Trust Fund to bail out the private college, which has been in financial difficulty for years.

“It’s the urgency of the moment,” said Representative Juandalynn Givan, who represents the Birmingham area. “Losing Birmingham-South would be a travesty for all of us.”

The college currently has 1,058 undergraduate students, according to recent data.

That number has declined since the pandemic, according to academic data. In 2019, the university enrolled 1209 students.

As of fall 2021, the school had 276 full-time employees. This number included 101 professors, about half of whom have tenured status.

“We simply cannot cut expenses any further and continue to provide a quality experience for our students,” President Daniel Coleman told lawmakers Monday.

A few hundred students can make a big difference to small colleges, which rely on enrollment and endowments to keep operating funds flowing.

In 2021, Birmingham-Southern College brought in $21,549,031 from tuition and student fees, according to a recent audit, compared to $21,762,261 in 2020. Housing and meals revenue also fell.

Most college students are from Alabama, according to federal data. According to Coleman, about 9,500 Birmingham-Southern graduates still live in Alabama.

Officials and lawmakers said that over time the college had exhausted its funds on a series of “well-intentioned” but poorly executed construction projects. After the 2008 financial crisis, the college made staff and service cuts, reducing employment to less than 300 employees.

Former President David Pollick resigned in 2010 after controversial over high spending and apparent accounting errors in student financial aid programs.

Hundreds of small public, private and for-profit colleges in the United States have closed since 2008, according to federal data from the US Department of Education.

One was Judson College in Alabama, one of the oldest women’s colleges in the country. The school closed in 2021 after raising funds to keep the doors open – then announcing that it was yet to close.

And others continue to struggle with declining enrollment and declining income. According to the Hechinger report Financial Fitness Trackingat least eight of Alabama’s 20 private colleges were struggling financially before the pandemic.

Birmingham-South was founded in 1898 as Birmingham College. The college’s real estate and buildings are worth about $85 million net, according to a 2021 audit.

Its endowment was valued at around $53 million in 2021, according to the audit. Most of this money comes from restricted donations, which means the school cannot necessarily transfer money to meet immediate needs. In 2007, the school’s endowment was over $110 million, but was later reduced by the financial crisis, levies, and declining returns.

In addition to potential state support, the school will need to raise about an additional $150 million to get back on its feet by 2026.

“It’s not a new phenomenon that state money goes to a private institution,” Wagoner said at the delegation’s meeting on Monday.

The Legislature has supported other private colleges, such as Tuskegee University, in the past – primarily through consortia. Givan noted a need at other local campuses, such as Miles College, but pointed out that without state support, Birmingham-Southern risked immediate closure.

Lawmakers plan to present the bailout to Gov. Kay Ivey within the next two months and anticipate support from all districts and parties.

“If we can see some public support, we can see this college turn around once and for all,” Coleman said.