What’s New
Birmingham-Southern College, a private liberal-arts institution plagued by more than a decade of financial problems, will close its doors at the end of May, the college announced Tuesday. The announcement follows an unsuccessful 18-month effort to keep the college afloat through a state loan program.
The Board of Trustees voted unanimously to close the 168-year-old college after the institution exhausted efforts to secure a $30-million loan through a state program that was created in June 2023 as a result of the institution’s advocacy, said Daniel B. Coleman, the college’s president.
“This is a tragic day for the college, our students, our employees, and our alumni,” Keith Thompson, chair of the Board of Trustees, said in the college’s closure announcement. “But it is also a terrible day for Birmingham, for the neighborhoods who have surrounded our campus for more than 100 years, and for Alabama.”
The Details
The decision to shutter Birmingham-Southern comes just a year after trustees voted to keep the college open, while fighting for a lifeline from the state government. At the time of the vote, the board had received assurances from state lawmakers that the college would “be positioned” to receive $30 million in bridge funding when the Distressed Institutions of Higher Learning Revolving Loan Program Act passed, according to the college’s closure announcement.
With the expectation that the college would have a clear path to receive the loan, it enrolled students and refilled faculty and staff positions for the fall, according to the announcement.
Now, students set to graduate after the spring of 2024 are left stranded. Scholarships offered by the college will not transfer to other institutions. Faculty members will be without jobs by the end of the summer. The college will “offer as much help as possible for employees,” its closure announcement stated, but it did not give any specifics, and a spokesperson for the institution declined to comment further.
“I can’t believe that it can just all end at 1 p.m. on a Tuesday,” said Pyunn Ntwari, a sophomore planning to major in chemistry.
Ntwari, the former student-government treasurer, had advocated for the loan with other students since December 2022. “We thought we had pretty good odds,” he said. “We thought we’d come back next year.”
Now he hopes the institution will make good on its promise to help ease the transfer process.
The Backdrop
In the detailed announcement of its impending closure, the college traced its financial issues back to the 2004-10 presidency of G. David Pollick, whose plan to significantly bolster enrollment entailed ambitious capital projects — including construction of a man-made lake — that resulted in the assumption of a “large debt.”
In 2010, the college discovered that several accounting errors had cost it millions. In conjunction with the loss of millions of dollars during the 2009 financial crisis, Birmingham-Southern made deep budget cuts and eliminated several majors and faculty positions. Pollick, who resigned shortly after the accounting crisis emerged, could not be reached for comment Tuesday.
In the years after Pollick’s resignation, his successors have aimed to stop the bleeding by increasing student enrollment, courting donors, and seeking lenders to buy off debt at a discount. One leader, Gen. Charles C. Krulak, likened the task to raising “Lazarus from the dead.” Krulak made an earnest effort — upon his retirement in 2015, Birmingham-Southern had recruited its largest cohort students since 2010. But both the college’s enrollment and endowment never fully recovered.
Birmingham-Southern officials hoped that the $30-million state loan would cover its operating costs while it temporarily shifted efforts toward a long-term fix: raising the college’s endowment to $200 million.
Young Boozer, the state treasurer who oversaw the loan program, denied Birmingham-Southern the critical loan twice — once in October 2023 and again in December — claiming the institution did not qualify for the program and was a “terrible credit risk.”
In February, State Sens. Jabo Waggoner and Rodger Smitherman introduced a bill to shift the loan program away from the state treasurer’s sole purview. But without sufficient House support, the college was at a dead end.
“We tried to talk [to Boozer] and … tried to advocate for BSC to stay open,” said Ntwari, who will lose a scholarship at Birmingham-Southern. “We’ve done all we could do. It’s very unfortunate.”
The Stakes
Birmingham-Southern is among several small, private institutions to recently announce their closure after years of financial woes. Other colleges, including Cazenovia College, in New York, and Holy Names University, in Oakland, closed amid unsustainable debts and blows to their endowments.
Finlandia University, a small college in Michigan that closed last year, also bore the brunt of past financial decisions that turned out poorly. In addition to an “unbearable debt load,” administrators discovered past leaders had already mortgaged all of the university’s assets.
Fund-raising shortfalls, debt, and failure to secure additional government funding also led to the closure of Iowa Wesleyan University in 2023. Some observers, however, have made the case that predictions of widespread closures tend to be overblown.
