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Press Release · April 22, 2010

Updating Master Plan for Higher Education is Key to Closing Skills Gap

State Should Raise Share of Students Eligible for UC, CSU—And Set Goals to Increase Bachelor’s Degrees, Community Collete Transfers

SAN FRANCISCO, April 22, 2010—California’s 50-year-old Master Plan for Higher Education should be updated to increase the number of high school graduates eligible for the University of California and California State University admission. It should also add explicit goals for raising college graduation rates. These recommendations are from a report released today by the Public Policy Institute of California (PPIC).

The Master Plan defined a strategy for California’s public higher education systems to meet the state’s challenges in 1960. Today, California faces new problems. By 2025, the state will have one million fewer college educated workers than the economy will require, according to PPIC projections. Updating the Master Plan is crucial to closing this skills gap. The PPIC report, Higher Education in California: New Goals for the Master Plan, proposes that the plan:

  • Raise eligibility goals for UC and CSU. These goals should increase gradually so that by 2025, the top 15 percent of the state’s high school students would be eligible for UC, up from 12.5 percent today. The top 40 percent would be eligible for CSU, up from 33 percent today.
  • Set explicit goals to increase community college transfers to CSU and UC. Today, fewer high school graduates in California than in other states enter four-year colleges, but many more enter community college. Ensuring that more of them successfully transfer to four-year institutions is critical to increasing the number of college graduates. By 2025, 60 percent of CSU graduates and 40 percent of UC graduates should be transfer students.
  • Add specific goals for college completion and the number of years it takes to get a degree. Previous PPIC work found that improving graduation rates from CSU—where only about half of incoming freshmen graduate in six years—is one of the most cost-effective ways to increase the number of college graduates in the state. Including specific performance measures in the Master Plan would allow the state to identify specific goals for the higher education systems and to track progress toward those goals.

“The state could make significant headway in closing the skills gap, and Californians would reap the benefits of increased economic mobility if these recommendations are implemented,” says Hans Johnson, PPIC senior fellow and author of the report. “There are other benefits, as well. Higher eligibility and transfer rates would lead to a more diverse student body—racially, ethnically, and economically—on UC and CSU campuses.”

Would these newly eligible students be ready for college? While California high school graduates are, on average, slightly less qualified for college than their peers nationwide, they have improved their skills over the last 20 years. These improvements suggest that meeting higher eligibility requirements in the proposed time frame is achievable. Current programs to improve college readiness can be expanded. Johnson finds that CSU’s approach—requiring students to complete all remedial work within one year—is highly effective and recommends that a similar approach be adopted at the community college level.

Finding the money to increase enrollment and raise graduation rates poses the greatest obstacle to meeting these new goals. Once fully implemented in 2025, PPIC’s recommendations would cost an additional $1.6 billion per year in current dollars and under current practices. These costs, however, would be phased in gradually over the next 15 years. The cost of implementation would be much lower in the early years partly because of the state’s demography: the number of high school graduates—which grew rapidly in the last 10 years—is expected to decline between 2010 and 2017.

To implement the proposed changes to the Master Plan, Johnson recommends that the state set specific goals, identify how to fund these goals, and measure progress toward reaching them. Funding should be aligned so that higher education institutions are rewarded for meeting benchmarks.

Steps toward change in higher education are already being taken. UC, CSU, and the community colleges have launched formal efforts to re-evaluate their roles and goals. The state legislature has created a joint committee to review the Master Plan and the state’s higher education policies.

State residents are also interested in change. Californians hold their public college and university systems in high esteem, according to the PPIC Statewide Survey. They are concerned with the costs of higher education and upset about budget cuts. Half believe a major change is needed in the state’s public higher education system—a 10 percent jump from last year.

“There’s no question that the state’s budget situation is dire,” Johnson says. “But it has also created momentum for change.”

Higher Education in California: New Goals for the Master Plan is supported with funding from The William and Flora Hewlett Foundation.

Download A Master Plan for Higher Education in California, 1960-1975[2.36MB, PDF] from the California Postsecondary Education Commission.


PPIC is dedicated to informing and improving public policy in California through independent, objective, nonpartisan research on major economic, social, and political issues. The institute was established in 1994 with an endowment from William R. Hewlett. As a private operating foundation, PPIC does not take or support positions on any ballot measure or on any local, state, or federal legislation, nor does it endorse, support, or oppose any political parties or candidates for public office.