Donate
Independent, objective, nonpartisan research
Blog Post · January 23, 2025

California’s Higher Education Landscape in 2025

photo - Sproul Hall and Students on UC Berkeley Campus

In California and across the country, bipartisan support for policies that help people enroll in, pay for, and complete college has long played a key role in strengthening social, economic, and political engagement across all communities. Boosting educational attainment across racial/ethnic groups, income levels, and immigration statuses leads to increased tax revenue, a more skilled workforce, reduced reliance on public assistance, lower incarceration rates, and a more informed and engaged citizenry. As we begin 2025 with a change in national leadership, it seems helpful to revisit some key bipartisan policies and outline some of the challenges and opportunities that lie ahead.

College access and affordability. The PPIC Statewide Survey has consistently found that Californians have big higher education aspirations but are concerned about being able to afford college. State, federal and institutional financial aid helps address these affordability concerns.

Unsurprisingly, both red and blue states have an interest in boosting access to financial aid as a means to increase educational attainment and strengthen regional and state economies. It is noteworthy that in 2001, Texas adopted a state policy aimed to provide qualified undocumented students access to in-state tuition and financial aid; California enacted an in-state tuition policy for undocumented students that same year, but did not provide access to state financial aid for another decade. Republican-led states such as Louisiana, Alabama, and Texas pioneered universal financial aid policies as early as 2017. California’s policy—which requires high school graduates to complete the state or federal financial aid application or opt out—was first implemented in the 2022–23 academic year.

In the year ahead, evidence of the positive contributions of education and a skilled workforce to communities and economies should spur additional bipartisan policies that aim to expand college accessibility and affordability.

College completion. California is one of many states with leaders across the political spectrum setting college completion goals as part of a workforce development strategy. Our recent analysis of college completion in California found promising improvements, with the California State University (CSU) system nearly doubling its four-year graduation rate over 10 years. Sustaining and building on gains in on-time completion and closing gaps across demographic groups will be critical, given the evidence that obtaining a college degree—as opposed to not enrolling in college or dropping out without a degree—plays a key role in promoting economic well-being. Additionally, with the advent of artificial intelligence, college graduates will be better positioned to adapt to fast-changing technologies.

Our work on pathways to college completion indicates that increasing the number of high school graduates who enroll directly in four-year colleges and growing the share of students who transfer from a community college to a four-year school could help improve college completion. Improving college readiness among K–12 students who have historically been underrepresented in higher education is an especially promising strategy for college completion, and the effectiveness of dual enrollment has also been documented in California and across the country. Importantly, high bachelor’s degree rates among students who transfer from community colleges suggests that strengthening the transfer pathway is critical to diversifying the pool of college graduates, given that California’s community colleges serve a large share of underrepresented students. In 2025, continued commitment to policies and practices aimed at improving college completion will help move the needle.

The value of college. In 2025, more work will be needed to address the perception that college is not worth the cost. Many years of data and research, including our own, has found that a college education provides one of the surest paths to economic mobility. Notably, we find that in 2021 a college graduate earned 62% more than a high school graduate. Recent research has found that the median earnings of Americans with without college degrees have fallen below median earnings in the early 1970s, while earnings for college graduates have risen.

It is important to acknowledge that for those who do have degrees, there is significant earnings variation across programs of study, with graduates in STEM fields earning almost twice as much as those who pursue degrees in education ($110,000 vs. $65,000). The return on investment is generally strong in California, although here too the return varies by major and type of credential. Additionally, wage disparities by race/ethnicity and gender persist, even after controlling for education and experience. Addressing these disparities will require long-term changes to both policy and practice, including efforts to address labor market segregation.

In the near term, it will be important to inform public perceptions by emphasizing the link between college, careers, and labor market returns. Making data more accessible and transparent will help individuals make informed decisions about whether and where to go to college and what to study. Forging closer connections between programs of study and job opportunities will also be key, especially for first-generation college graduates who seek to become first-generation professionals. In 2025, California’s Master Plan for Career Education and Cradle to Career data system—which includes free college and career planning tools—can help the state support these efforts.

In the year ahead, the independent, nonpartisan, data-driven work we do at the PPIC Higher Education Center will be more important than ever. To support a brighter future for all Californians, we will continue to examine college access, outcomes, and affordability, with the goal of helping ensure a more effective, efficient, and equitable higher education system.

Topics

Access Affordability California Community Colleges California State University Completion Equity Finance Higher Education University of California Workforce Needs