The Alabama House of Representatives on Thursday voted to abolish the loan program for colleges that lawmakers created last year in response to a request for state assistance from Birmingham-Southern College, a private college.

HB415 by Rep. Juandalynn Givan, D-Birmingham, will close the Distressed Institutions of Higher Education Revolving Loan Program. The House passed it by a vote of 98-0. It moves to the Senate.

Last year, the Legislature passed a bill to set up the Distressed Institutions loan fund and put $30 million into it with hopes of providing the financial help that BSC officials said was needed for the college to continue to operate.

The legislation put State Treasurer Young Boozer in charge of the loan program and set standards that colleges had to meet to qualify for a loan. Boozer denied BSC’s loan application last year, finding that the college did not meet the qualifications, including the ability to provide the state first position on its collateral assets.

BSC disputed Boozer’s decision and challenged it with a lawsuit, but the judge dismissed the case. A bill proposed this year to remove control of the program from Boozer failed to gain support.

In March, BSC announced it was closing its doors on May 31.

The $30 million lawmakers put into the Distressed Institutions loan fund will be moved to two grant programs. The Lieutenant Governor’s K-12 Capital Grant program and the Community Services Grants program will each get $15 million.

Givan worked to save BSC because it is an important institution in her district. On Thursday, she thanked legislative leaders for helping get the bill passed last year. She commended Boozer for enforcing the qualifications set in the law in his decision to deny the loan.

“I want to thank Young Boozer for his efforts to ensure that due diligence was exercised in moving or attempting to move this process forward,” Givan said. “It’s not always easy when we stand in these positions.

“And I stand in a precarious situation because I represent the area. But I would never do anything against the people of Alabama. If it’s not right, it’s not right. If it’s broken, it’s broken, and if it can’t be fixed, it cannot be fixed.”

Rep. Mary Moore, D-Birmingham, said she was concerned that when lawmakers created the fund last year, they justified it in part by saying that it was not just for BSC and that the loan fund could help other struggling schools. But Moore said the fact that the Legislature is abolishing the program now that BSC has announced it is closing shows that it was never intended to help other colleges.

“We passed it under that umbrella that it was there for everybody,” Moore said. “But now we come back and say, ‘no, it was just for Birmingham Southern.’”

Rep. Danny Garrett, R-Trussville, who chairs the House Ways and Means Education committee, said the program was initially intended to be an option for other colleges. But Garrett said it turned out that the standards for qualifying for a loan were difficult for a struggling college to meet. Selma University also applied for loan last year and was denied by Boozer. A hospital also applied for a loan.

“We did learn how difficult it’s going to be to get a loan under this program,” Garrett said. “There were very tight parameters. One of the main conditions was that the institution had to be able to provide a first position collateral. And that’s very, practically difficult to do.”