California has the largest public higher education system in the country, and more Californians than ever are going to college and earning degrees. However, the next governor will need to address affordability concerns and persistent disparities in college access and success. In addition, California’s higher education institutions face federal policy changes that affect funding for academic research and financial aid; college enrollment by international students; and the relationship between higher education and workforce agencies.

Managing California’s higher education system amid economic pressures and a significant shift in the federal role won’t be easy. A clear understanding of the important issues will help.

Fundamentals

California’s higher education system has much to celebrate: college enrollment and completion are at all-time highs; more than half of public university graduates are debt-free; and the gap in student outcomes between California and the rest of the nation has narrowed. However, college enrollment and outcomes vary across the state. Additionally, the higher education ecosystem and its funding mechanisms—shaped largely by the 1960 Master Plan—are not designed for today’s reality.

Key Issues

Affordability is a key challenge for many students. California has the nation’s most generous financial aid program, which allows most college students to pay no tuition and graduate debt free. While the “sticker price” for college has gone up over time, the inflation-adjusted tuition and fees students pay after receiving aid has actually declined. But the longer it takes to earn a degree, the higher the cost for both the student and the state. Moreover, it is California’s high cost of living—especially the cost of food and housing—that makes college affordability a major challenge. The state needs to streamline pathways to financial support—particularly for students with the lowest incomes.

Improving transfer pathways remains a priority. More than half of Californians who pursue higher education enroll in the community college system, and although most want to earn a bachelor’s degree, few transfer in a timely manner. Multiple reforms have been enacted but unevenly implemented; as a result, the average student who transfers has accumulated more than a year of excess credits while at a CCC. The good news? The vast majority of CCC students who do apply for transfer are admitted and graduate shortly thereafter. Clearer, more efficient transfer pathways would help more students attain their academic goals.

Expanding capacity may require innovative approaches. California’s public universities have set application and enrollment records over the past two decades, but eligible students are still turned away or do not enroll. Expanding capacity in the UC and CSU systems would help more students earn bachelor’s degrees faster; however, adding the space to educate more students is costly. The state would benefit from systematically exploring the cost and value of alternatives such as co-locating bachelor’s degree programs on CSU and CCC campuses and expanding effective online learning models.  

Higher education funding is complex and siloed. State appropriations for higher education have increased significantly over the past 30 years, but the funding impact across the three public higher education segments has been mixed. Education funding protections from Proposition 98 have increased CCC funding, while state support for the UC and CSU systems stagnated or declined. Both four-year segments have increased tuition to support their operations. UC, CSU, and CCC increasingly share students, services, programs, and facilities, with varying levels of effectiveness. Each segment faces challenges—from enrollment declines to a lack of capacity to meet outsized student demand. With continued budget deferrals on the horizon, the state may need to explore new ways to manage challenges within and across the three segments.

Technological innovation should be supported and inclusively deployed. California’s public and private higher education institutions have long facilitated groundbreaking research and developed new technologies, including artificial intelligence (AI). Given unprecedented federal funding cuts, the state may need to step in to help sustain California’s leadership in research and innovation. The systems also play a central role in meeting workforce needs by educating and training the next generation of leaders, innovators, entrepreneurs, and technical workers. State leaders should work with higher education systems and employers on efforts to ensure that AI and other innovations are deployed inclusively, and all Californians are prepared to use them ethically and responsibly.

An educated citizenry can sustain a thriving economy and spur civic engagement. It will be critical for California’s next governor to stay the course in efforts to ensure that all students can attend and complete college, identify comprehensive ways to manage costs, and foster economic opportunity across the Golden State.