SB31 Alabama 2024 Session

Summary

Primary Sponsor

J.T. WaggonerSenator

Republican

Session

Regular Session 2024

Title

Distressed Institutions of Higher Education Revolving Loan Program amended, loan qualifications revised, administering agency changed

Summary

SB31 revises the Distressed Institutions of Higher Education Revolving Loan Program to move administration to the Alabama Commission on Higher Education, clarify which institutions qualify, and set loan terms and oversight.

What This Bill Does

It defines eligible Alabama colleges and universities that may receive loans based on criteria such as operating for more than 50 years, community impact, and financial hardship. It transfers administration from the State Treasurer to the Alabama Commission on Higher Education and requires a thorough review of each applicant's ability to repay, including a written financial restructuring plan. It specifies loan terms (interest at the State Revolving Loan Fund rate, up to 20 years, secured by collateral) and conditions for fund disbursement and repayment, and creates a dedicated loan fund with annual reporting and enforcement provisions.

Who It Affects

• Eligible public or private colleges or universities in Alabama that meet the defined criteria and may apply for loans, subject to collateral, restructuring plans, and repayment requirements.
• The Alabama Commission on Higher Education and the State Treasurer (as administrator) along with lending banks and state lawmakers, who will oversee, implement, and fund the program and handle reporting and enforcement.

Key Provisions

• The program is to be administered by the State Treasurer Executive Director of the Alabama Commission on Higher Education (AACHE).
• Eligible institutions are those operating in Alabama for more than 50 years, with significant community impact, facing financial hardship that could lead to closure, having a board-approved loan application, and possessing collateral sufficient to secure the loan (verified by a non-creditor bank letter).
• Applicants must submit a written financial restructuring plan showing how they can repay the loan, with specific facts and bank-determined repayment ability, before funds are released.
• Loans must bear interest at the published rate for the State Revolving Loan Fund, be repaid within 20 years, and be secured by a first perfected security interest in all collateral.
• The Treasurer/Executive Director may set loan terms, including private funding commitments, disbursement timing, and repayment terms; loans require a written contract with breach triggering immediate liability for the unpaid balance.
• A Distressed Institutions of Higher Education Loan Program Fund is created to receive appropriations and loan repayments, with funds rolling over each year and expenses paid from the fund; annual program reporting is required to state officials.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Education