Birmingham-Southern College
The agency that oversees accreditation of Birmingham-Southern College (BSC) has placed the once-highly regarded liberal-arts institution on "warning" status, according to a report today at donaldwatkins.com. The move adds to signs that the school's days might be numbered. Watkins is a longtime attorney who comes from an extraordinarily accomplished family, with llifelong ties to higher education. Under the headline "Accrediting Agency for Birmingham-Southern Places College on 'Warning' Status," Watkins writes:
The Southern Association of Colleges and Schools Commission (SACSCOC) is the accrediting agency for colleges and schools located in Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, Texas, and Virginia.
SACSCOC accredits Birmingham-Southern College (BSC), a historically White private college (HWCU) located on the West side of Birmingham. Without SACSCOC accreditation, a college degree from BSC would be worthless.
On December 3, 2023, SACSCOC placed Birmingham-Southern on “Warning” status. SACSCOC's accreditation of BSC includes all components of the institution—all programs, branch campuses, off-campus sites, and distance-education programs as reported to SACSCOC. Thus, the “Warning” status applies to the entire institution
SACSCOC determined that BSC failed to demonstrate compliance with the Principles of Accreditation with respect to the college's governing board of trustees and its destitute financial condition. In short, BSC’s is in a big financial mess.
BSC's problems do not end there, Watkins reports:
In addition to its problems with SACSCOC accreditation, on December 22, 2023, Moody’s withdrew BSC’s credit rating. Without a Moody's credit rating, no prudent, knowledgeable, and responsible lender will make a loan to BSC in any amount of money.
For context, credit ratings for individuals range from a low of 350 (or poor) to a high of 850. (or excellent). If your credit rating sits at 350, you are better off today than BSC -- which has no credit rating whatsoever.
Despite BSC’s governance issues and its destitute financial position, as documented by SACSCOC and Moody's, the city of Birmingham approved a $5-million loan for the college on November 28, 2023. The city's loan comes from tax dollars, rather than private donations that the mayor and council members mustered up from their circle of rich and politically connected friends.
Will the $5-million loan turn out well for the city -- and its taxpayers? Almost certainly not, Watkins writes:
In contrast, the city has no known program for lending taxpayer money to city residents/businesses that lack a credit score and the ability to repay the loan. BSC's $5-million loan is a special taxpayer-sponsored perk for a private HWCU that is trapped on Birmingham's West side.
What is worse, city officials have taken no legal action to protect taxpayers by placing the city of Birmingham's $5-million loan in the superior-lien position with respect to all existing lenders.
Furthermore, the city has done absolutely nothing to ensure that BSC addresses the governance issues that got BSC into this financial mess in the first place.
At this juncture, the city's $5-million loan to BSC is an utter and complete waste of tax dollars. It will never be repaid.
Alarming social trends also play a part in this sad picture. Watkins writes:
Unfortunately, BSC is the victim of six decades of “white” flight from the West side of Birmingham -- and all that comes with this demographic change. No amount of money from the city or state will save it.
Last October, the state rejected BSC's request for a $30 million loan. A state-court judge in Montgomery later determined that the state's denial of this $30-million loan request was a reasonable and prudent financial decision by Alabama State Treasurer Young Boozer III.
Finally, there are plenty of productive, income-producing, and beneficial uses for BSC’s 192-acre campus after the college closes. The city needs to revitalize the area by embracing a newer, better, and higher use for this 192 acres of property.
