In 1988, the Texas student aid community addressed the issue of defaults in the guaranteed student loan program, creating a strategic default initiative. In June 1998, this same group of student aid officials met again to examine the current status of defaults and to share ideas on ways to prevent defaults. This report was intended as a resource for conference participants. It updates recommendations made in 1988 and clarifies the latest research on defaults in Texas. Following a brief introduction, the report revisits the initial initiative and makes several new recommendations, addressing issues such as: administrative practices; preloan counseling and early financial planning; state and national legislative initiatives; debt management; and loan servicing. In section 3, reviewing historical trends, grant-to-loan imbalances, portfolio mix, cohort default rates, and default claims are discussed. Section 4 examines the traits and indicators associated with defaulting. Section 5 lists 5 policy implications arising from the various findings noting that defaults are not confined to one school sector, the need for wise education investments, the necessity to limit borrowing for students at-risk of defaulting, the need to promote academic success, and the need to help students find and keep jobs. Appended are a review of the 1988 recommendations and a discussion of the model development. (Contains 16 references and 26 endnotes.) (MAB)