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Testimony: California’s Future Need for Bachelor’s Degrees

Patrick Murphy November 1, 2016

Patrick Murphy, PPIC research director, testified before the Senate Budget Subcommittee Number 1 on Education at San Diego City College in San Diego today (November 1, 2016). Here are his prepared remarks.

The Public Policy Institute of California (PPIC) projects that between now and 2030 California will fall 1.1 million bachelor’s degrees short of workforce demand. Closing this gap will require substantial improvements in access to four-year colleges, transfer rates from community colleges, and completion rates among college students. This testimony describes specific targets for California’s public and private colleges and universities to help ensure that the state will have a sufficient number of highly educated workers in the future. It also briefly describes a recent pilot program in California that offers bachelor’s degrees at community colleges and similar efforts in other states in the context of closing the workforce skills gap.

PPIC senior fellow Hans Johnson, in testimony before the Assembly Budget Subcommittee Number 2, has offered a scenario for how the state might close the workforce skills gap relative to its current baseline. Assuming that college enrollment rates, completion rates, and transfer rates remain at current levels, the state will produce 3.1 million bachelor’s degrees over the next 15 years. Our closing-the-gap scenario charts a course to producing 4.2 million bachelor’s degrees by 2030—a 36% increase over the baseline for the entire projection period. It should be emphasized that this goal cannot be realized unless the state substantially improves the attainment of degrees by currently underrepresented groups, including first-generation college students, low-income students, Latinos, and African Americans.

There are two important issues to note regarding our closing-the-gap scenario. First, successfully reaching this goal requires contributions from all three of the state’s higher education systems as well as private colleges. Our scenario sets the following targets:

  • Access to four-year public institutions will increase, with eligibility increasing 5 percentage points over current levels at UC (the top 17.5% of high school graduates will be eligible for UC, up from the 12.5% set by California’s Master Plan for Higher Education) and 6.7 percentage points at CSU (the top 40% will be eligible for CSU, up from the top third). These new eligibility levels will be phased in over an eight-year period.
  • The number of transfer students from community colleges will grow incrementally to 35% above baseline levels over a five-year period.
  • Completion rates will increase 9 percentage points at UC and 17 percentage points at CSU. At UC, completion rates for students who enroll as freshmen will increase incrementally from 83% in 2016 to 92% by 2026. Completion rates for freshmen at CSU will increase incrementally from 57% in 2016 to 74% by 2030.
  • Private nonprofit colleges, which produce about one-third of all bachelor’s degrees annually, will keep pace with the relative rate of growth, increasing their production of degrees by 26% over baseline levels.

The second notable point is that there is no single solution to closing this gap. Our scenario represents only one path toward reaching the number of bachelor’s-degree holders the state needs. Based on the structure and performance of the current system, our scenario estimates the relative contribution that higher education segments could make in the future. Other combinations are conceivable. For example, a smaller expansion in eligibility and greater improvements in completion rates could also close the gap.

The assumptions underpinning our closing-the-gap scenario are clearly ambitious. Are the assumptions realistic? Is it possible to, for example, raise the completion rate at CSUs by 17 percentage points? Based on recent improvements, we think so. In another PPIC report, my colleagues Jacob Jackson and Kevin Cook observed that, from 2009 to 2015, the CSU system increased its six-year graduation rate 6 percentage points, from 51% to 57%. These increases came at a time when the system was focused on improving completion as part of its 2015 Graduation Initiative. This past September, Chancellor White announced that CSU seeks even greater improvements as part of its 2025 Graduation Initiative. The recently announced goals, including achieving a six-year graduation rate of 70% by 2025, are consistent with our closing-the-gap scenario.

We did not include in our scenario any assumptions regarding the potential for California’s community colleges to produce bachelor’s degrees. Beginning in 2015, the California Community Colleges Chancellor’s Office granted approval to 15 colleges to offer bachelor’s degrees in specific majors as a pilot program under Senate Bill 850. At this time, these programs are quite small and it is difficult to predict what impact they may have on the long-term production of bachelor’s degrees. A brief review of the experiences of two other states provides examples of different trajectories this pilot program could take.

Community colleges in Washington State began a pilot program offering applied bachelor’s degrees following legislation passed in 2005. The program, which focuses on fields currently not addressed by the state’s four-year public institutions, became part of the state’s regular programming in 2010. Community colleges currently offer bachelor’s degrees in 30 fields but produced only about 300 (less than 1%) of the more than 33,000 bachelor’s degrees conferred in the state in 2015.

In Florida, legislation authorizing community colleges to begin offering bachelor’s degrees passed in 2001. Florida has been quite aggressive in expanding the programs and schools offering bachelor’s degrees, with 24 of the state’s 28 colleges offering a total of 170 such programs. In 2015, these colleges produced 6,900 (about 7%) of the state’s 100,500 bachelor’s degrees.

As it is currently configured, California’s pilot program resembles the Washington approach. It has the potential to supply applied degrees in specific fields, making a contribution to the demand for skilled labor in some professions. But, due to its small scale, it is unlikely to have a significant impact on the overall workforce skills gap in the near term.

This is not to suggest that community colleges do not play a role in meeting the growing demand for bachelor’s degrees. In fact, about 103,000 community college students in California transfer to four-year institutions each year. Our closing-the-gap scenario assumes an increase in the number of transfers of 35% over five years—which would mean an additional 36,000 students moving on to four-year institutions. Should those students complete their bachelor’s degrees at rates similar to today’s transfer students, this would lead to tens of thousands of additional bachelor’s-degree holders by 2025.

Community colleges, UC, CSU, and private colleges must all play a role in the state’s efforts to meet the demands of a changing economy. Closing the workforce skills gap will lead to better economic outcomes for all Californians, increased state revenues, and reduced social service demands.

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