Founded at West Chester University of Pennsylvania, Chi Alpha Epsilon was organized in 1989. Responding to an increased need to acknowledge the continuing successes of students in the Academic Development Program and recognizing that students who share similar experiences could serve as significant models for others, a Greek letter honor society was proposed by Dr. Elbert Saddler. A university psychologist and counseling coordinator for the ACT 101 Program, Dr. Saddler identified eligible students and alumni to form the nucleus who are now the Founding members of XAE. 

Directors of Student Support Services, McNair Scholars, Educational Opportunity Programs, and developmental programs at many colleges and universities have hailed its formation. The National Association for Developmental Education (NADE) has officially endorsed Chi Alpha Epsilon as an honor society for developmental education students.The Council for Opportunity in Education is also encouraging participation. Chi Alpha Epsilon was formed to recognize the academic achievements of students admitted to colleges and the universities through non-traditional criteria and serves developmental, SSS, McNair Scholars, and Educational Opportunity Program students. Its purposes are to promote continued high academic standards, to foster increased communication among its members, and to honor academic excellence achieved by those students. The involvement of eligible alumni enables networking for members. Programs sponsored by the society encourage other students toward this accomplishment. 

The honor society also has the potential to be a significant political force in the support of funding for developmental studies and educational opportunity programs nationwide.