The private historically-black colleges and universities lining the Texas I-20 corridor east of Dallas may not be the first place policymakers think to look for examples of best practices. These institutions, including Wiley College, Texas College and Southwestern Christian College are small and operate on limited resources. But they also have a strong sense of history (Wiley College is the home of the “Great Debaters”) and an unwavering dedication to their mission of serving first-generation college students who can benefit from the small, familial college atmosphere. And ten years ago these three schools, along with three other Texas HBCU’s, banded together to create a model of success in preventing student loan defaults: the Texas HBCU Default Management Consortium.
The Texas Consortium, which was created with help and encouragement from Texas Guaranteed and the Department of Education, was established in response to “big panic” over high default rates. The panic was caused by a rule change in the 1998 Higher Education Act amendments which removed the default rate exemption for HBCU’s—starting in 2004, HBCU’s with default rates above the 25 percent cut-off were at risk of losing eligibility for federal student financial aid. Without access to loan or grant funds, the very survival of these institutions was at risk.
In response, the HBCU’s did not turn away from their historical mission to serve