California Higher Education: Diminishing Opportunity and Competitiveness

Posted on 13 December 2012

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By Patrick M. Callan

Any Californian with a modicum of concern about the future of the state should be dismayed by the state's massive disinvestment in one of its major public assets. Since 2008, state and local support for public higher education has been reduced by $2.4 billion, a cut of nearly 20 percent. The passage of Proposition 30 creates a plateau on this downward path, but it will neither restore lost college opportunity to thousands of Californians nor assure the future availability of college access. It could, however, buy time and space for state and college leaders to undertake a long overdue reexamination of California higher education in the context of current and prospective state needs for a competitive workforce and for college opportunity.

The Californians most immediately affected by reduced state appropriations are those who would have enrolled in college had it not been for higher costs or reduced spaces. The best way to estimate the extent of this diminished college opportunity is to compare the number of students who were expected to enroll in public colleges and universities prior to the onset of the "great recession" with the numbers who actually enrolled. In 2011, despite high rates of unemployment, which usually stimulate higher college enrollments, California's community colleges enrolled 460,000 fewer students than had been projected in 2004; the California State University's enrollments were 60,500 below expectations; and the University of California was down 15,500 students. Shortfalls of this magnitude reflect a major retrenchment of higher education opportunity.

At a time of severe financial stress for California students and families, tuition has outpaced both inflation and family income. As Californians struggled with high unemployment and stagnant and decreasing family incomes, state government and public higher education shifted major portions of the burden of their budget shortfalls onto students and families. In the last five years, tuition has increased by 93 percent at the University of California, 101 percent at the California State University and 57 percent at the community colleges. Meanwhile, median family income (for a four person family) decreased by 3.8 percent between 2007 and 2011. The issue is not whether college is worth the price or even whether, as some might argue, some sectors of public higher education may have been "underpriced" in the past compared to public institutions in other states, but whether precipitous increases in the cost of attending college can be justified at a time of severe public financial hardship.

The ramifications of diminished college opportunity extend far beyond these years of financial troubles and those most immediately affected. Economic growth and our state's standard of living depend on our ability to compete in the knowledge-based global economy that requires college-educated and trained workers. Several analyses now show that the state is on a trajectory that will leave it far short of workers needed for national and international competitiveness. For example, the San Francisco based Public Policy Institute of California has estimated that by 2020, 39 percent of California jobs will require a bachelor's degree, but the proportion of working age population with bachelor's degrees will fall far short at 33 percent. A recent national report from the Georgetown Center on Education and the Workforce concluded that within six years, 61 percent of all jobs in California will require education and training beyond high school. Between 2008 and 2018, jobs requiring postsecondary education will grow by 1.8 million, far outpacing the increases in jobs for high school graduates. One likely consequence is that California will become less attractive to employers who require college-trained workers, leading to an exodus of middle class jobs, as California's economy is overtaken by states and nations that are more successful in developing a twenty-first century workforce.

Confronted with severely constrained college opportunity for individuals and declining state economic competitiveness, the responses of state policymakers and higher education leaders have been timid and unimaginative. The state clings to the structure of a higher education "Master Plan" crafted in the late 1950's, while the plan's most fundamental principle of opportunity for all Californians who can benefit from college is eviscerated. The absence of state priorities is reflected in continuing and proposed duplicative and expensive campuses and programs. Examples include the University of California campus at Merced, the law school at UC Irvine and a proposed sixth UC medical school at Riverside - fueled primarily by campus aspirations, local boosterism, and pork barrel politics. At the same time, undergraduate enrollments have been capped and opportunities to enroll at public colleges and universities have been restricted. One consequence has been an absolute decrease of almost a half million students at California community colleges since 2008. Those students who do enroll in community colleges are often not able to get into needed courses, and several hundred thousand were on waiting lists for classes this fall. Recent rates of tuition increases are unsustainable, even with the current election year freeze required by the governor and legislature. In short, public higher education in California appears brittle, capable only of expanding and contracting enrollments and shifting costs between the state and students in response to the availability or lack of availability of state resources.

But the most striking deficit is the deficit of innovation. Little has been done either by state or public higher education leaders to explore alternatives that were not available when the 1960 Master Plan was formulated. Particularly striking is the timidity in exploring the use of digital technologies to enhance learning and constrain costs in delivering courses and degree programs on and off campus on a scale that might help reverse the decline of college opportunity and improve state economic competitiveness. One wonders why a state that prides itself on innovation in so many other spheres, has pretty much limited its responses to financial adversity to raising tuition and reducing enrollments.

It is time to ask a new set of questions across all sectors of higher education. What are the most pressing needs of the state for individual opportunity and economic prosperity? How can limited public resources be allocated to best address those needs? How can college access and affordability be protected in weak as well as flourishing economic circumstances? Could more collaboration between the University of California, the California state universities and the community colleges around innovative approaches to development of shared courses and programs, replace the "every train on its own tracks" model of higher education that undergirded the 1960 higher education Master Plan? Is the organization of public higher education into three massive statewide systems an impediment to the nimbleness and culture of innovation that will characterize successful higher education organizations in the age of the knowledge-based global economy?

It may be that despite devastating financial setbacks and unimaginative responses, California retains its status as one of the leading twentieth century systems of higher education. What is needed from state and college and university leaders is a vision for the twenty-first century that can be as powerful in our time as the 1960 Master Plan for Higher Education was for its era. Public investment, however constrained, should develop and support that vision rather than restoration of the status quo ante.

Patrick M. Callan is president of the Higher Education Policy Institute, a Senior Fellow of the Steinhardt Institute for Higher Education Policy, New York University, and a Visiting Scholar at the Institute for Governmental Studies, UC Berkeley. He was president of the National Center for Public Policy and Higher Education from 1998 to 2011.

The author is right to say that many people are concerned about education; however, before education gets anymore money, there must be performance audits made at all levels of education. Probably much waste-- like excessive administrative salaries and perks or archaic levels of bureaucracy, i.e. county ofices of education ($5 billion a year)-- would be uncovered. Audits would also show that certain areas of eduaction really do need more money.

Actually, performance audits would be useful for all tax-funded enties. Of course, an audit is not necessary to uncover such abuses as a state employee, prison psychiatrist, getting almost a million dollar salary; or the UC football coach getting over $2 million. (UC excuses such excesses saying that some of that comes from private sources).

Liberals cry that the waste and abuses represent a very small portion of a government budget. Conservatives tend to see almost everything as fraud or waste. Let's get to the happy median for local, state and federal budgets.

I think it is wrong to say, if you have any concern about California educaction .......

No, California is in competition with 49 other states for capital, talent, and people. If California cannot compete, so be it. Than all of the above will leave the state. That is, in fact, what is happening. California has been loosing the middle and upper middle class for some time. This has impacted it in numerous ways. This, honestly, is what people like Gov. Brown should be thinking about.