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The purpose of today’s hearing is to examine whether HBCUs are receiving adequate support from the Small Business Administration (SBA) to help foster entrepreneurship. Over 150 years ago, the first HBCUs were born out of adversity to ensure African Americans had an opportunity to attend college.  Today, there are more than 100 historic institutions across the country, serving nearly 300,000 students, many of whom are low-income and the first in their family to attend college.  

HBCUs’ contributions to our country are extraordinary, producing over 50 percent of African American professionals.  Many of our nation’s leaders in government, business, and academia graduated from HBCUs, including Supreme Court Justice Thurgood Marshall, Oprah Winfrey, and Langston Hughes just to name a few.  

HBCUs are also deeply rooted in their local communities, partnering with schools and community organizations to improve the quality of education for disadvantaged minority students and fostering entrepreneurship. The positive economic impact HBCUs have provided to our nation also cannot be understated. Data provided by the National Center for Education Statistics reveals that graduates from are responsible for 24 percent of the degrees earned by African American in STEM and generate $14.8 billion in economic activity, creating nearly 135,000 jobs. 

Recognizing the importance of HBCUs, President Jimmy Carter signed the first executive order to establish a White House Initiative to overcome the effects of discriminatory treatment and to strengthen the capacity of HBCUs to provide a quality education.  Every Administration since then has issued a similar executive order continuing support for HBCUs.  

Most recently, President Trump, signed Executive Order 13779, which set two goals: (1) increase the private-sector role in strengthening HBCUs; and (2) enhance HBCUs capabilities for helping young adults.  As part of that initiative, the SBA is required to develop an annual plan detailing its efforts to support HBCU participation in its entrepreneurship programs.  

At the request of Representative Adams, and 19 Members of Congress, the Government Accountability Office (GAO) examined SBA’s entrepreneurship efforts with HBCUs.  The GAO recently released its preliminary findings, which found SBA entrepreneurship activities and programs do not specifically target HBCUs, but some collaboration does exist.  

The GAO report found only two HBCUs host lead SBDCs while there are sixteen HBCUs with SBDC service centers on campus. They also concluded that over a decade, SBA signed just 24 strategic alliance memorandums with HBCUs to support minority-owned businesses and that SBA cosponsored six counseling and training activities with HBCUs over a five-year period.

Clearly, more needs to be done to strengthen the collaboration between SBA and HBCUs. And that is why we are holding this hearing today.  HBCUs offer tremendous opportunities to foster entrepreneurship and drive economic growth, particularly in underserved communities. 

As many of us here in the room already know, small business owners in underserved communities face a number of challenges, which include access to affordable capital from traditional lenders, securing federal contracting opportunities, and a lack of a business network and mentoring. During recent testimony before our Committee, Ms. Sharon Pinder testified that the loan denial rate is three times higher for people of color than non-minority firms, and, if approved, minorities often have higher interest rates.  

As the Chairwoman on the Subcommittee on Investigations, Oversight and Regulations, I am committed to working with SBA and its entrepreneurial development ecosystem to help minority entrepreneurs overcome these challenges and develop a clear path to small business ownership. 

This ecosystem has the ability to reach entrepreneurs to make them aware of programs, like the Community Advantage Pilot Program which is specifically designed to increase SBA-guaranteed loans to small businesses in underserved areas. We know that small dollar loans greatly benefit emerging markets and start-ups, but these programs can’t fully succeed if the SBA is not allocating resources to increase awareness and participation. 

It is my hope that the first panel will provide members with a better understanding of SBA’s current activities to promote collaboration with HBCUs and also identify ways to strengthen that collaboration. I also look forward to the second panel, where we will hear from the leaders of four HBCUs.  It is important to hear their perspectives on SBA’s level of engagement with their faculty, students, and communities. Because in the end this is about supporting entrepreneurs, small businesses, and job growth in all our communities.