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What can I do now to help BSC as it closes?
A gift to the College between now and May 31 will help ensure that our students, faculty, and staff have the smoothest possible transition to what comes next.
Gifts to BSC can be made here or via mail at:
BSC will continue to accept gifts of stock, IRA Charitable Rollovers and Donor-Advised Funds through May 31. For information: [email protected]; 205-226-4909
How did BSC get to this point?
Over the last two decades, BSC struggled to stabilize its finances through a series of leadership changes and challenges within and beyond its control. The College focused on raising unrestricted operating funds and drew too heavily on its shrinking endowment without making meaningful progress in increasing that endowment.
The implementation of several ambitious capital projects in the mid-2000s – and the assumption of large debt to fund them – coincided with two factors that led to a decade-plus-long financial struggle:
- The crash of the financial markets in 2009, in which BSC sustained a $25 million loss to the value of its endowment.
- The discovery in 2010 of a material error in the budgeting of federal student financial aid, which came to about $5 million per year against a budget of $49 million.
These factors led to millions of dollars in budget cuts, the elimination of five majors and 29 faculty positions, and the suspension of the faculty and staff’s generous retirement match. The crisis triggered an additional $12 million draw on the endowment by the end of the 2009-2010 fiscal year.
When BSC’s 16th president, Daniel B. Coleman, took office in December 2018, he saw the financial issues through the lens of 30-plus years of experience in the finance industry. Too-high draws on the College endowment to cover operating losses depleted what should be – and must be – the institution’s most stable resource.
His plan called for raising a new endowment large enough to fund at least 20 percent of annual operating costs. To allow time to raise those funds, BSC appealed to state legislators to create a loan fund using a small fraction of a $2.8 billion surplus in the Education Trust Fund. The Alabama Legislature passed SB278 – the Distressed Institutions of Higher Learning Revolving Loan Program Act – with overwhelming bipartisan support. Although she had opposed the plan, Gov. Kay Ivey submitted executive amendments that were accepted by the Legislature and signed the bill on June 16, 2023.
What happened to the state money?
BSC met the qualifications for the loan and provided two proposals in which the State of Alabama would have had first position on collateral more than sufficient to back the loan. Even so, State Treasurer Young J. Boozer III denied BSC the loan in October 2023 after months of delays.
On February 6, 2024, the College’s legislative champions – Sen. Jabo Waggoner ’60 and Sen. Rodger Smitherman – introduced a bill to amend the 2023 Act. That bill, which moved the administration of the loan program to the Alabama Commission on Higher Education, added a layer of review to ensure the state’s position, set the loan terms, and specified a time frame for approval or denial, passed the Alabama Senate on March 5.
On March 20, through the efforts of Rep. David Faulkner, the House Ways & Means Education Committee approved a substitute bill that further strengthened the State’s position. Even so, subsequent conversations with House members and leadership confirmed that the bill did not have enough support to move forward.
The $30 million set aside in 2023 for the loan program remains unused.
I thought Gen. Krulak saved the College. What happened?
During his four years as our 13th president, Gen. Charles C. Krulak focused on raising enough operating funds to keep the College afloat. He reworked the budget to prevent further cuts to the faculty. When he retired in 2015, he had recruited the largest entering class since 2010, succeeded in moving the College off sanction with its accrediting organization, and, in the eyes of many, had saved the College.
But the endowment had dropped from $122 million to $53 million by the time of Gen. Krulak’s arrival, and fundraising efforts during his years were focused on spendable money. Many donors were asked to liquidate their endowed funds so the College could continue to operate. Most agreed, with the expectation that BSC would restore those funds when it could.
What happens to the faculty and staff?
BSC will offer as much help as possible for its nearly 250 employees, almost all of whom will be displaced by May 31, with the rest to follow over the summer. Information has been distributed to them and meetings will be scheduled in the coming days to provide individualized consultation.
What will Alabama lose with BSC’s closure?
The College has an annual direct economic impact of $90.7 million statewide, with $68 million of that benefiting Jefferson County. That is one measurable loss that reaches nearly $1 billion over 10 years.
Alabama will also lose a nationally ranked liberal arts college – one that produces critical thinkers, problem solvers, and servant leaders who live, work, and pay taxes in every county in the state. BSC has also provided an outsized number of physicians, dentists, lawyers, non-profit heads, educators, and leaders in business and civic life over its 167 years.
More than half of BSC’s 17,000 living alumni live in Alabama; many of those returned to the state to work and raise their families after completing graduate and professional school elsewhere.
Losing BSC will not help the many people and organizations in Alabama who are working hard to reverse the state’s ranking as third worst in the nation for retaining its college graduates.
How will closing the College impact the neighborhood?
Until a buyer is found, the campus will be monitored by security officers.
BSC sits on 192 acres – with dozens of administrative and classroom buildings, residence halls, an apartment complex with a pool, a lake, and playing fields.
As the anchor tenant of this part of the city, BSC has provided stability, security, and service to our neighbors in Bush Hills, College Hills, and Smithfield, and vice versa for more than a century. With millions of federal dollars on the way to create affordable housing and a more visible and attractive pathway between downtown and the west, such a large property being left vacant for any length of time is a huge setback to the neighborhoods that surround it.
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Can I still purchase a BSC car tag following the announcement of BSC closing?
The last day a BSC supporter will be able to renew/purchase a BSC tag will be April 30, 2024. (More info here regarding BSC Car Tags)