a new vision for california higher education: a model public agenda

8/12/2019 A New Vision for California Higher Education: A Model Public Agenda

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N A N C Y S H U L O C K

C O L L E E N M O O R E

CONNIE TAN

A NEW VISION FORCALIFORNIA HIGHER EDUCATION:

A Model Public Agenda

M A R C H 2 0 1 4

institute for higher education

leadership & policy

6000 J Street, Tahoe Hall 3063 | Sacramento, CA 95819-6081 T (916) 278-3888 | F (916) 278-3907 | www.csus.edu/ihelp


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I | INSTITU TE FOR HIGHER EDUCATION LEADERSHIP & POLICY AT CALIFORNIA STATE UNIVERSIT Y, SACRAMENTO

A New Vision for California Higher EducationExecutive Summary

An Emerging Consensus forTransformative ChangesCalifornias approach to structuring and nancing highereducation is out of sync with the needs of students and thestate. The world has changed dramatically since the 1960Master Plan thrust California into a position of internationalleadership in public higher education. Today, despite havingcolleges and universities that are the envy of the world,California is not educating its people to levels demanded bythe global and regional economies.

The Master Plan, innovative for its time, has proveninsufficient to guide Californias higher education systemthrough the changes of the last few decades. It is not just

that the Plan is under-funded for the size and scope of themission; it is outmoded. It imposes an unagile, state-centeredstructure on a dynamic, multi-region state. Needs that falloutside of, or between, or outgrow the capacities of the threepublic higher education systems cannot be well addressed bycontinuing the traditional approach to governance.

Numerous reports spanning the last few decades have calledfor fundamental changes in the organization and deliveryof higher education in California. This report draws on theseand other sources of information to construct a model public

agenda for California higher education. A public agendastarts with the needs of Californians and imagines how thoseneeds can best be met in ways that may stretch beyond thehistorically-dened missions of the three public segments.A public agenda can point to opportunities for new roles,new collaborations, and new policies that are better attunedto todays needs. This model public agenda is intended toinspire broad discussion about the future of California highereducation, potentially leading to an official public agenda forCalifornia higher education that can guide and support thechanges that are so urgently needed.

The Scope of the Challenge and theSegments RolesIn a companion report to this one, called Average WontDo: Performance Trends in California Higher Education asa Foundation for Action , we documented that Californiashigher education performance is lagging other statesand falling short of Californias needs. Other research andadvocacy organizations have concluded that California

needs to produce one million more bachelors degreesand 2.5 to 3.5 million more total degrees and certicates(depending on what kinds of credentials are counted)

beyond what current trends are expected to yield. Thesetargets are good reminders of the enormous scope ofthe challenge, but meeting these goals would requirean aggressive rate of change that the current system isvirtually incapable of producing.

We present an alternative scenario that is still ambitious butreects realistic opportunities for the three public segmentsto enroll and graduate more students. The scenario reectssubstantial annual increases in the number of studentsearning degrees and certicates from the CaliforniaCommunity Colleges (CCC), with the largest increase tocome from career-oriented credentials. The scenario alsoprojects major growth in students earning bachelorsdegrees from the California State University (CSU) andmoderate contributions from the University of California(UC) where undergraduate enrollments are low, relative tothe other segments. This alternative nevertheless falls wellshort of reaching the familiar targets, suggesting that thegap would have to be lled by private providers or frommore striking changes in the structure and operation ofthe public sector. Whatever the combination of providers,

efforts to increase the number of Californians with collegecredentials cannot be just a numbers game, but must beundertaken with steadfast attention to academic quality.

Current Structures Make Change DifficultAll three segments have worked hard to increasereadiness, access, student success, and equity, butnone has been able to achieve a pace or scope oftransformation to match Californias challenges. Certainly,the lack of resources in recent years created a harsh scalenvironment where improvement was all but impossible.But nancial resources are not the only problem.Numerous structural barriers make it extremely difficultfor the three public segments to achieve the progressbeing called for today.

Calls to revise or fund the Master Plan miss the markbecause they fail to address the underlying constraintsthat complicate segment efforts to serve more studentseffectively and efficiently. The structural constraintsdetailed in this report include:


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A NEW VISION FOR CALIFORNIA HIGHER EDUCATION: A MODEL PUBLIC A|

n A lack of capacity in baccalaureate programs;

n An under-resourced community college systemserving 70% of public enrollments;

n A poorly structured approach to nancial aid forcommunity college students;

n An incomplete and disjointed nance policy structure;

n Structurally inseparable research and baccalaureatemissions at UC;

n Lack of state policy leadership for a system built oninterdependence; and

n Insufficient differentiation of mission and program.

A new public agenda must identify the means toovercome these structural barriers.

A New Approach to Meet CaliforniasHigher Education NeedsDrawing from the emerging consensus about the kindsof transformations that are needed, this model publicagenda envisions a three-part strategy of regionalism,specialization, and technology that requires leadershipand collaborative mechanisms that do not exist.

n Regional consortia comprising all higher educationproviders (public and private) and K-12 representativesin each dened region of the state would set targetsfor enrollments and completions and determineappropriate roles and contributions of providers.

n The regional consortia would guide greater programspecialization to take best advantage of the distinctivecapabilities of each institution to address unique needsof students and regions and to nance a more inclusiveand cost-effective system of higher education.

n Each consortium would identify how technology would be used purposefully and effectively to ensurethat students maintain access to a broad complementof academic pathways regardless of what may beoffered at their home institutions.

Plans and targets developed by the regional consortiawould roll up to state-level plans, targets, budgets, andpolicies. Accountability would be a shared responsibility

of institutions, regional consortia, and state lawmakers. Withresource allocations based on regional plans and targets,and developed with better knowledge of costs, segments

and regional consortia would be better able to explain theirbudget requests to lawmakers, to account for the use ofresources, and to report on outcomes. Institutions, families,and all Californians would be better able to hold lawmakersaccountable for providing needed resources.

The strategy is designed to achieve four overriding goals:

Goal 1: Increase access to higher educationinstitutions and attainment of high-quality degreesand certicates, with an emphasis on access and

attainment among younger adultsGoal 2: Reduce performance gaps in higher educationaccess and attainment

Goal 3: Improve the stability and adequacy of publicand private investments in higher education

Goal 4: Provide state policy leadership that enablesan effective regional approach to meeting Californiashigher education needs, connected to an overall state-level vision

Effective State Policy Leadership for aRegional ModelStrong, capable, and informed policy leadership at the statelevel is essential for this new vision to take hold. This functionwould best be lled by an office of higher education thatis part of the administration and reports to the governor. The governor enacts budgets, signs legislation, and fulllsother critical responsibilities that require high-level staffsupport similar to what exists for K-12 education. Under this

model, segment leaders would have a clear point of accessin working with the administration to develop well-informedscal and other policies.

This vision, or something equally transformative, cannot beimplemented overnight. But there is great danger in lettingpressing annual budgets and bill deadlines delay theseconversations. Short-term concerns can push longer-termconcerns off the agenda over and over until the realization that,had we done something then , we would have something now .


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1 | INSTITU TE FOR HIGHER EDUCATION LEADERSHIP & POLICY AT CALIFORNIA STATE UNIVERSIT Y, SACRAMENTO

A World of ChangesIn 1960 California leapt to the front of the pack by layingout a vision for public higher education predicated onthe values of access, affordability, and quality, deliveredthrough three distinct segments the University ofCalifornia (UC), the California State University (CSU), andthe California Community Colleges (CCC). The Master Plansdifferentiation of mission across the three segments,the guarantee of broad access, the low cost to students,and the high quality of education have been widelycredited with powering Californias dynamic economy andsustaining the California dream for much of the secondhalf of the twentieth century.

Many of these qualities s till exist today, but Californiashigher education system has grown increasingly outof sync with the needs of students and the state as awhole. The world has changed fundamentally since theinception of the Master Plan. For example, in 1960:

n Ninety-two percent of the California population wasWhite, compared to 40% today;

n Only a small share of high school graduates wenton to college, most of whom entered colleges anduniversities well prepared to succeed;

n Instructional technology consisted of lectures,books, and chalkboards; and

n Only a small fraction of jobs required education ortraining beyond high school.

Today, in contrast, the need for some education ortraining beyond high school is almost universal.Understanding this, todays students arrive at collegefrom diverse backgrounds with high aspirations. Butmany of them lack the academic preparation, self-condence, and variety of skills needed to successfullynavigate the college environment. At the same time,innovations in educational technology are changing

how people of all ages acquire knowledge, includingcollege-level learning. Education and training havebecome lifelong endeavors with people returning to

college to retrain, update skills, or change careers. Thesedevelopments have fundamentally changed the contextof higher education. California, and all states, are ndingit challenging to adapt to the new and dynamic world ofhigher education.

Looking forward, there are more demographic changesto come. Latinos now account for over half of thetotal K-12 public school enrollment. Accordingly, thenon-White, working-age population in California, whichwas 29% of the total in 1980, is expected to reach 70%in 2060, with an especially large increase among Latino

populations (Figure 1).

Introduction

Figure 1Growing Racial/Ethnic Diversity of California Population

(Ages 25-64)

60%

50%

40%

30%

20%

10%

0%2000 2010 2020 2030 2040 2050 2060

White Latino Asian Black

Source: State of California, Department of Finance, 2000-2060 Projections

Californias K-12 and higher education systems have takenmyriad actions to respond to these many changes, butto date, have been unable to achieve the pace or scope

of transformation that is needed. In higher educationspecically, a host of budgetary, governance, and otherstructural factors have constrained the ability of allthree segments to adapt to new conditions. As a result,as documented in a January 2014 report, Average WontDo: Performance Trends in California Higher Education asa Foundation for Action , and in other repor ts, Californiashigher education performance is lagging other states andfalling short of Californias needs:

It seems as though our state, once the innovator,has become a reluctant follower.

(Little Hoover Commission, 2013)


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n Too many school children dont get the necessaryhelp to prepare for the academic and non-academicdimensions of college readiness;

n Too many students enter college without the nancialresources to allow them to devote sufficient andconsistent time to their education;

n Too many students take too long to graduate fromcollege, costing them time and wages and oftencosting the state extra money per student;

n Too many students drop out of college altogetherbefore earning any credential or degree; and

n Too many students are without the skills andknowledge they need to thrive in the workplace, evenafter completing college programs.

The Master Plan, while innovative for its time, has proveninsufficient to guide Californias higher education systemthrough the changes of the last few decades. It is not justthat the Plan is under-funded; it is outmoded. It imposesan unagile, state-centered structure on a dynamic,multi-region state. The dimensions of the states people,challenges, and opportunities have outgrown the visionfrom a different era.

A Public Agenda to Reect EmergingConsensusCalls for a fundamentally new governance approachbegan in the 1990s, when alarm about the inability ofthe state to steer its higher education system throughthe economic recession found expression in fourmajor reports. The National Center for Public Policyand Higher Education drew on these reports to craftA Memorandum to the Next Governor of Californiain 1998 called The Challenges Facing California HigherEducation . Continuing largely unheeded, such callsaccelerated, with several major reports issued in just thelast two years to update the prescription for fundamentalreform to conform to the realities of higher education

today. In quick succession, the Public Policy Institute ofCalifornia (Higher Education in California: New Goals forthe Master Plan) , California Competes (The Road Ahead:Higher Education, Californias Promise, and our FutureEconomy), the Little Hoover Commission (A New Planfor a New Economy: Reimagining Higher Education) , andthe Committee for Economic Development (BoostingCalifornias Postsecondary Education Performance: A PolicyStatement and Call to Action) offered analyses of theproblem and prescriptions for the solution.

Two messages are loud and clear in all of these studies:(1) the needs state, regional, system, institutional, andindividual are urgent and (2) the solutions requirecomprehensive policy changes. Efforts abound acrossCalifornias colleges and universities to increase studentsuccess, but the sum of these individual efforts stands littlechance of propelling California back to its more familiarposition of leadership unless accompanied by major statepolicy innovations aimed at meeting the needs of allCalifornians in all regions of the state.

All of the problems that have led to the currentcrises can be solved, but doing so will require newvision and strong leadership both by policymakersin Sacramento and by higher education officials.

(Public Policy Institute of California, 2010)

The time appears to be ripe for a new MasterPlan, one that would: (1) replace emphasis on thedistinguishing characteristics of the three publicsegments with concern for regional cooperation andorganization, and (2) include K-12 education withinits scope as a full partner.

(National Center for Public Policy and HigherEducation, 1998)


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Introduction

In this report, we present a model public agenda forhigher education in California. We call it a model becauseit is intended to provoke new conversations about what

California higher educationmight look like. We call it apublic agenda to distinguishit clearly from the Master Plan.A public agenda, which manystates have already adopted,starts with the public andthen imagines how best tomeet public needs throughcurrent, new, and/or modiedinstitutions, collaborations,and instructional approaches.

It encourages innovativethinking about how best toserve Californians, and it works across systems, focusingon ways to best support students as they move acrossthe public education pipelines. By contrast, the MasterPlan has always been about the state maintaining threedifferentiated public higher education segments. Needsthat fall outside of, or between, or outgrow the capacitiesof the three segments cannot be well addressed bycontinuing the traditional approach to governance.

In Part I of this report, we discuss the performance ofCalifornia higher education, focusing on troublesometrends and describing the structural problems thatare barriers to improvement. We draw on existinganalyses and our own calculations to demonstrate themagnitude of improvements that are needed. We showthat ambitious projections of growth in degrees andcerticates projections that reect the segmentsdifferent roles and opportunities will fall well short ofthe goals for increased degree attainment that we havebecome accustomed to hearing.

In Part II of this report, we make the case that Californiacan restore higher education to greatness by shiftingfrom a statewide, segmental approach to a region-driven,

collaborative approach thatpromotes greater programspecialization at individualinstitutions and enableswidespread student accessthrough the purposeful andeffective use of technology.

We begin Part II byoutlining the goals of sucha transformation and thecommitments that California

would need to make toachieve it. We describehow the new regional model might work, includingdiscussions of how to nance it to the necessary level andensure accountability for meeting the higher educationneeds of Californians. We additionally argue for astate policy approach that enables and supports gooddecision-making at the regional level while guiding thestate to overall success. To that end, we call for an officeof higher education that reports directly to the governorand provides a clear point of access for the segments toengage with the administration in the development ofscal and other policies.

California can revamp its higher education system tomeet the challenges of the 21st century, but doing sowill require a clear understanding of the systems currentperformance and an honest assessment of where thebest opportunities for improvement lie. We turn to theseissues next.

Needs that fall outside of, orbetween, or outgrow the

capacities of the three segmentscannot be well addressed bycontinuing the traditionalapproach to governance.

The Governor and Legislature should encouragethe drafters to think responsibly about how highereducation is structured andre-examine therationale for how the three-tier system is currentlyorganized and to explore greater campus-levelspecialization in all segments.

(Little Hoover Commission, 2013)

This can be achieved only by integrated andcollaborative approaches to development,delivery, evaluation and credentialing of highereducation across the public institutions andsystems and between public, private, non-protand for-prot sectors.

(Committee for Economic Development, 2013)


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PART I:Where We Are and Where We Need to BeA Stagnating SystemEducational attainment. Educational attainment levelsare stagnant in California, endangering the statessocial structures, economic mobility, and workforcecompetitiveness in the years ahead. Many other nationsand U.S. states are moving aggressively to increaselevels of higher educational attainment among youngeradults and gain an advantage in the increasingly globaleconomy. While attainment levels among older adults inCalifornia compare well with leading states and countries,the state is falling behind in educating younger adults.A breakdown by age of Californias rank in the shareof adults with a college degree reects both the paststrength of Californias higher education system and itscurrent mediocrity: while the state ranks near the top inthe percentage of older adults with a college degree, itranks in the bottom half of states in the share of adultsages 25-34 holding degrees (Figure 2).

Californias declining position in educational attainmentis a reection of its comparatively low rate of awardingcollege degrees to its population, ranking especially low(45th) among states in the number of bachelors degreesawarded per 1,000 residents ages 18 to 24 (Figure 3).

Completion rates. Completion rates in Californias twopublic university systems compare favorably to otherstates, but there is substantial room for improvementgiven that average completion rates at public universitiesin the United States are considered unacceptably lowfor a leading nation. Of particular concern are thecompletion numbers in the community colleges (Figure4). The state ranks 48th in the number of certicatesand degrees awarded as a share of students enrolledin community colleges. Low completion rates in thetwo-year sector have an especially large impact because

Source: National Center for Higher Education Management Systems(NCHEMS) Information Center for Higher Education Policymaking and

Analysis, 2011

Age GroupRank in Percent of Adults

with Associate Degreeor Higher

Rank in Percent of Adultswith Bachelors Degree

or Higher

65+ 4th 6th

45-64 17th 16th

35-44 30th 18th

25-34 29th 25th

Figure 2California is Not Keeping Up with Educating Young Adults

Figure 3California Ranks Low among States in

Degrees Awarded per Capita

Source: NCHEMS Information Center for Higher Education Policymakingand Analysis, 2009 (certicates/degrees) and National Science FoundationScience and Engineering Indicators 2014 (bachelors degrees)

908070605040302010

0

53.6

33.929.2

83.3

55.2

42.7

Top 5 States United States California

Certicates and Degrees Awarded per1,000 Residents without College Degrees

Bachelors Degrees Awarded per1,000 Residents Age 18-24

39th 45th

Rank amongstates

California sends more of its students to communitycolleges than any other state , with 73% of publicundergraduate enrollment in the two-year sectorcompared to a national average of 52%. Many studentsachieve successful outcomes in the CCC without earninga credential, but the same is true for communitycolleges in other states, so the low relative rankingwarrants attention.

The magnitude of this underperformance issuch that it will not be successfully addressed bymodest injections of funding or by tweaks in currenteducational policy and practice.

(Committee for Economic Development, 2013)


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Figure 4California Lags in Certificates and Degrees Awarded perEnrollments in Community Colleges, Not in Universities

Source: NCHEMS Information Center for Higher Education Policymakingand Analysis, 2009

30

25

20

15

10

5

0

24.120.8

22.924.8

14.5

10.4

Top 5 States United States California

Universities

Certicates and Degrees Awarded per 100 Students Enrolled

Community Colleges

48th5thRank

amongstates

Performance gaps across student populations andregions. California is faring worse than most statesin preparing students for college, and differences are

magnied by region and across racial/ethnic groups.Californias Black and Latino students are much less likelythan White and Asian students to demonstrate prociencyon standardized tests (e.g., California Standards Tests,CSUs Early Assessment Program exams) and are less likelyto take college entrance exams (ACT, SAT) or to score well

Figure 6Disparities in Educational Attainment among Racial/Ethnic

Groups in California, Ages 25-34

Source: NCHEMS calculations of US Census Bureaus 2009-2011 AmericanCommunity Survey

Associate Degree or Higher Bachelors Degree or Higher

70%

60%

50%

40%

30%

20%

10%

0%Asian White California

TotalBlack Latino

66%

59%52%

44% 38%31% 29%

21%18%

12%

70%

60%

50%

40%

30%

20%

10%

0%

Figure 5Smaller Share of Black and Latino High School Graduates

Complete A-G Curriculum

Source: California Department of Education, Dataquest, 2012(http://dq.cde.ca.gov/dataquest/)

62%

45%38%

29% 28%

Asian* White All Students Black Latino

* Important differences among sub-groups of the Asian population are maskedby data limitations.

if they do. Black and Latino students are also less likelyto enroll in and complete the full set of courses requiredto be eligible for admission into Californias public

universities (Figure 5). Gaps across groups in preparation,enrollment and completion are problematic because theyplay out in uneven levels of educational attainment andpersonal income. Far smaller proportions of Black andLatino students have earned college degrees than Asianand White students (Figure 6). Reducing performancegaps is a national imperative, underscored by the Obamaadministrations recent convening of a higher educationsummit of over 100 colleges and universities to makecommitments to increase college opportunity andsuccess for underserved students. But California has a

particularly heavy lift, as the state has among the largestgaps, nationally, between Whites and underrepresentedminorities in educational attainment. Vast differencesexist across regions as well. Discrepancies prevail at allpoints of the pipeline. Students in certain regions havegreater access to and success in the university preparatorya-g curriculum and advanced math and science courses,enroll in college directly out of high school at greaterrates, and complete college at higher rates. Thesediscrepancies across regions lead ultimately to starkdifferences in education levels and personal income

across regions (Figure 7).

PART I:Where We Are and Where We Need to Be


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Figure 7 Major Gaps in Educational Attainment and Per Capita Income by Region

Source: Authors calcu lations based on US Census Bureaus American Community Survey, 2008-2012 estimates for at tainment data and 2012 estimatefor income data

Percent of Population Aged 25 and Over With a Bachelors Degree or Higher Per Capita Income

50%

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

40,000

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0Sacramento

TahoeCentralCoast

NorthernCalifornia

CentralSierra

InlandEmpire

UpperSacramento

San JoaquinValley

Los AngelesSan DiegoImperial

OrangeCounty

Bay Area

42%

37%33%

29% 29% 29%

22%20% 20% 20%

16%

Current Structures Make ChangeDifficult

Efforts to address stagnant levels of educationalattainment and to close performance gaps across studentpopulations and regions are constrained by institutionaland policymaking structures. Repeated critiques of the1960 Master Plan hint at some structural constraints butcalls to revise or fund the Master Plan miss the targetbecause they fail to address these underlying constraintsthat make it hard for the segments to make sufficientgains in serving more students effectively and efficiently. This section describes some of these constraints to setthe stage for a new vision that seeks to overcome them.

Lack of capacity in baccalaureate programs. Californiais 45th among states in bachelors degrees awarded asa share of the young adult population, yet completionat the universities is above the national average (Figures3 and 4). Increasing capacity can be addressed in threestructural ways: (1) increasing the number of freshmenwho enroll in a university, (2) increasing the numberof transfer students from community college, and

(3) increasing the number of students who receivecredentials from other providers either privateinstitutions or new kinds of public institutions. Anyof these approaches would benet from more stateresources, but none can be achieved without signicantchanges to the structure of the system.

(1) The rst route is constrained officially by the MasterPlan, which limits enrollment of freshmen at CSUand UC and relies on the community college transferfunction to supply juniors and seniors to the public

universities. When more than one-third or one-eighthof high school graduates meet CSU and UC eligibilitycriteria, respectively, the presumption has been thateligibility standards should be raised to prevent toomany students from enrolling directly in the statespublic universities. Even now, many eligible studentsare denied admission to campuses that are at capacity(i.e., impacted). Other states do not limit freshmanaccess to public universities to such an extent.


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(2) The second route is constrained by inherentlimitations on the community college system tosupport students who intend to transfer. The CCC

has multiple missions competing for resources withthe transfer mission. Because state law severelyrestricts its tuition revenue (discussed more below),it receives far fewer dollars per student than eitheruniversity system yet serves a more educationallydiverse student population, many of whom requiresubstantial support services. A complex set oftransfer policies causes students to earn many coursecredits that do not count toward specic universitytransfer requirements, depressing transfer rates. The new associate degrees for transfer promise

to increase numbers of transfers, but it is unlikelythat this reform, alone, can increase the number ofgraduates to desirable levels.

(3) The third route for increasing bachelors degrees greater reliance on other public or private providers is constrained by existing state policy as well.Enrollment targets for existing public institutions arebased on their historical missions and enrollments, anapproach that precludes setting degree attainmenttargets based on an assessment of public need andthen

considering how public investments may bestbe used to achieve those targets. The baccalaureateshortage might require a new kind of public institutionthat doesnt t neatly into any one segment and wasnever envisioned by the Master Plan, such as an onlineuniversity to serve working adults, a new polytechniccampus merging assets of a community college anda CSU campus, or an undergraduate university withUC admission requirements but without a premierresearch mission. Alternatively or additionally, it maybe that increasing state nancial aid to students in

private institutions is a more cost-effective strategyfor increasing attainment of bachelors degrees.But because nancial aid and higher educationappropriations are treated separately, there is no directway for the state to arrive at this conclusion or enactpolicy to address it.

An under-resourced segment serving a majority of students. As a whole, California is not shirking its duty tofund higher education, at least as compared to other states:

per-student support from state appropriations is 11%above the national average. At the same time, Californiapublic higher education operates with considerably lessrevenue per student than the national average (Figure 8),ranking 47th among states in total revenues (state andtuition) per full-time equivalent student. The reason forthe poor standing in total revenues for higher education isthe lowest-in-the-nation tuition rate in the largest-in-the-nation community college system. For decades Californiapolicymakers have tried to uphold the Master Plansprinciple of access by keeping tuition extremely low in the

community colleges. However, this commitment to keepingtuition low has not been matched by a proportionateincrease in state appropriations. Additionally, under the feewaiver policy, over half of community college students payno fees at all. Under these policies, the state forgoes mostpotential revenue from the 70% of the states students whoattend community colleges. The ongoing lack of revenuein the colleges is a major structural problem with no easysolution: lawmakers want to uphold the affordabilityprinciple of the Master Plan and will raise fees only as a lastresort, leaving the states largest higher education system

chronically underfunded.

Figure 8Lower Tuition Collections Account forLower Total Revenues for California

State Appropriations per FTES Tuition Revenue per FTES

Source: State Higher Education Executive Officers, State Higher EducationFinance FY 2012

$12,000

$10,000

$8,000

$6,000

$4,000

$2,000

$0California National Average

$8,842

$11,095

$5,189

$5,906

$2,265

$6,577


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Poorly structured approach to nancial aid forcommunity colleges. The assumption has been that thecolleges are affordable because fees are kept low and

waived altogether for many students. Low fees and feewaivers constitute the prevailing nancial aid strategy forthe CCC. In reality, there is a serious affordability problemin the community colleges. California performs poorlyrelative to other states in the share of family incomerequired to pay for public two-year colleges, even thoughall other states charge more in tuition. That is because, asshown in Figure 9, tuition accounts for a very small shareof total costs. Students pay far more for living expenses,books, and supplies. In fact, those non-tuition costs forCCC students are about as much as they are for students

in UC and CSU. The states CalGrant program is not welldesigned for CCC students, because the states primarystrategy for keeping community colleges affordable hashistorically been low fees and fee waivers, not direct aid tostudents. This poorly structured approach to affordabilityfor the CCC is not cost-effective for taxpayers. Compelledby nancial barriers to take on heavy work schedules, CCCstudents tend to enroll too part-time and too sporadicallyto be successful. This contributes to the low success ratesthat, in turn, raise the cost per completion in the system.

Figure 9Living Expenses Make Up Biggest Share of

Students Budgets

$35,000

$30,000

$25,000

$20,000

$15,000

$10,000

$5,000

$0

Source: California Legislative Analysts Office, Analysis of Higher EducationBudget, 2014-2015

UC CSU CCC

* Includes housing, food, transportation, and personal expenses

Incomplete and disjointed nance policy structure. The1960 Master Plan offered guidance on dividing studentsacross the three segments but not on dividing resources

among them. It contains no provision for understandingor determining what is an adequate level of supportfor each segment, whether per-student expendituresshould be higher in one segment than another forsimilar programs, what constitutes affordability in eachsegment, or how the costs of public higher educationshould be shared between students and taxpayers.Policymaking for the three main components of nancepolicy appropriations, tuition, and nancial aid areaddressed through separate mechanisms. Coherent scalplanning is also inhibited by a state budget process by

which allocations to higher education are nalized onlyafter lawmakers have satised statutory obligations inother sectors of government. Lawmakers have viewedtuition as a safety valve that can be turned up or down tocompensate for changes in state funding. With fundingmostly down in recent years, tuition has risen steeply(Figure 10) resulting in students bearing a larger share oftotal costs. Although total revenue for higher educationin 2012 is nearly identical to that in 2003 (in constantdollars), the share of the revenue contributed by tuitionhas doubled in the last ten years. The share varies greatly

across segments, according to the California Legislative

Figure 10Steep Increases in Annual Tuition/Fees for

Resident Undergraduates

Source: California Postsecondary Education Commission, ResidentUndergraduate Fees in Actual Dollars for 2001-02 through 2010-11;subsequent years from the California Legislative Analysts 2013-14 Analysis of the Higher Education Budget

UC CSU CCC$14,000

$12,000

$10,000

$8,000

$6,000$4,000

$2,000

$0

2 0 0 3

- 2 0 0 4

2 0 0 4

- 2 0 0 5

2 0 0 5

- 2 0 0 6

2 0 0 6

- 2 0 0 7

2 0 0 7

- 2 0 0 8

2 0 0 8

- 2 0 0 9

2 0 0 9

- 2 0 1 0

2 0 1 0

- 2 0 1 1

2 0 1 1

- 2 0 1 2

2 0 1 2

- 2 0 1 3

2 0 1 3

- 2 0 1 4

Tuition and FeesBooks and SuppliesLiving Expenses*


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Analyst, with the share of core funding coming fromstudent tuition at 45% for UC, 41% for CSU, and 6% forCCC. Absent integrated and coherent policymaking

structures, policy has unfolded through incremental anddisconnected adjustments that have affected affordableaccess for students and nancial sustainability for collegesand universities in ways never intended.

Structurally inseparable research and baccalaureatemissions at UC. As the state moves to increase thenumber of Californians with bachelors degrees, it isimportant to know how each segment can contribute tothe effort and how the state could best devote resourcesto this high-priority goal. That requires an understandingof the costs to enroll and graduate undergraduates. Butappropriations for instruction at UC, the states premierresearch university, include signicant support for facultyresearch through teaching loads that are much lower thanat CSU or CCC. The UC faculty role entails a major researchcomponent, in every UC campus and every discipline.Given current accounting and reporting practices, thestate cannot track the cost of UCs research missionindependent of its undergraduate mission, making itimpossible to evaluate the relative cost-effectiveness ofproviding baccalaureate instruction in each of the three

segments. In order to determine whether more of UCsteaching resources should be targeted toward educatingundergraduates, it would be necessary as well to developsome means of assessing how the current UC researcheffort meets the publics needs.

System interdependence, yet no state policyleadership. The Master Plan created a system thatis fundamentally interdependent, beginning with itsreliance on community colleges to provide the majorityof undergraduate education. Students must experiencecoordinated systems if they are to succeed. The studentpopulations that are most vulnerable to the statesdisjointed approach to governance are those students thestate most needs to support if California is going to movethe needle on postsecondary success. Yet California isone of only two states (the other is Michigan) that do nothave an entity assigned to provide policy leadership andsupport for the higher education enterprise. Instead, theculture of higher education in the state is that of voluntarycooperation. This is particularly challenging when natural

issues of territoriality arise between systems that competefor funding. Lawmakers expect the institutions to worktogether on high-priority initiatives and there is a strong

history of such cooperation, formalized through theIntersegmental Coordinating Committee and the CaliforniaEducation Round Table. The heads of the three publicsegments have recently pledged cooperation to increaseattainment of college degrees and certicates. As valuableas this is, cooperation across three massive state systemsat top levels cannot translate easily or quickly enough tothe unique kinds of collaboration needed in each region.In addition, institutional leaders may not be in the bestposition to identify major unmet needs or shortcomingsof the states higher education system and to propose new

models of institutional delivery or credentialing. With noregional structure to drive change and limited state-levelguidance, the segments are unlikely to steer themselves tothe kind of transformational change that is needed.

Master Plan-specied missions impede differentiation. The Master Plan assigned each segment a distinct mission,which provided great order and clarity in the high-growthdecades following its adoption. There has been littleexplicit variation among the campuses within a system.For the most part, policies and programs enacted for

a segment take similar form across 9 UC campuses, 23CSU campuses, and 112 community colleges. The lack ofdifferentiation, or program specialization, is particularlynotable in technical education. Many technical careerstoday require college credentials that did not require themin decades past. Many technical careers today did not existin decades past. Yet California is the rare state that doesnot emphasize technical colleges or programs. It is oneof only two states that do not confer associates of applied science. Only one of Californias 112 community collegesand two of its 23 CSUs are identied as technical institutions

of higher education. Nor do Californias public universitiesaward applied baccalaureate degrees to articulate withapplied two-year programs. Another form of differentiationthat might have evolved but for Master Plan structures is aselective (i.e., UC-type) college, without a premier researchmission, to focus on the highest quality undergraduateeducation. There are postsecondary needs today that mightbest be addressed by institutions other than the three typesdened under the Master Plan.


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A NEW VISION FOR CALIFORNIA HIGHER EDUCATION: A MODEL PUBLIC AG|

The Scope of the Challenge: Where DoWe Need to Go? The beginning of this sec tion established some troublingtrends in higher education performance and describedsome of the structural problems that have been a barrier toimprovement. Here we raise the difficult question of Wheredo we need to go? How many Californians should be going tocollege and completing degrees and certicates?

This is a complex question to answer. In 2009, the Public PolicyInstitute of California reported that the states future workforceneeds would require one million more bachelors degrees, by2025, than what present trends would yield. Shortly thereafter,the Obama administration set as a national goal that 60% of theU.S. population will hold a college degree or a certicate of atleast one year in length by the year 2020. That goal is based onmatching the educational attainment rates of leading nationsand meeting workforce projections. The current nationalattainment level, which includes only a rough estimate ofcerticate holders, is about 44%.

The National Center for Higher Education ManagementSystems (NCHEMS) has built computational models to showhow states compare on college attainment and other measuresof higher education performance. Many states have used these

data to set their own attainment goals. A nonprot, CaliforniaCompetes, has adapted the national model to California, usingsome different assumptions. For example, its model includesonly those associate degrees awarded in vocational elds, inan attempt not to double count associate degrees earned inelds designed for transfer in pursuit of a bachelors degree.Additionally, it counts certicates of one year or more towardthe attainment target of degree holders. From its model,California Competes estimates that, in order to reach a degree-attainment goal of 55%, the states colleges and universitieswould need to produce about 2.3 million degrees and

certicates above what current trends would yield .

For purposes of this public agenda, these attainment numbersand goals are good reminders of the scope of the challenge.However, meeting either of these goals would require anaggressive rate of change that the current system is virtuallyincapable of producing. Figure 11 shows the systems currentperformance trends projected to 2025 compared against thegrowth trend that would be needed to reach the additional onemillion bachelors degrees. Over the past ten years, UC and CSU

have been increasing degree production at an average annualrate of about 3%. The baseline portion of the graph showsthose trends continuing. But the rate of growth needed to yield

the additional one million is far higher about 9.2% per year.

Educational Attainment Dened The standard for measuring a states higher educationperformance is college attainment, that is, the percentof a states population that holds a college degree. There are different ways to approach even this singlestandard. Different age groupings can be used as candifferent types of college credentials. Two commonage groups are the working-age population (ages

25-64) and the young adult population (ages 25-34). The educational attainment of these groups can bemeasured at the level of bachelors degree or higher,or associate degree or higher. There are no reliabledata on the proportion of the population that holdsa college certicate. That is unfortunate since laboreconomists have documented good returns in wagesto students who complete workforce-orientedcerticates, especially in health and technical elds.

Figure 11Projected Annual Bachelors Degree Production Needed

to Reach One Million More Goal

Source: Authors projections based on data on past degree productionfrom the CCC Datamart, CSU Analytic Studies, and UC AccountabilityReport and InfoCenter.

Annual Degree Production at current rates of growth

Annual Degree Production to meet one million more goal

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11 | INSTIT UTE FOR HIGHER EDUCATION LEADERSHIP & POLICY AT CALIFORNIA STATE UNIVERSI TY, SACRAMENTO


Figure 12A Daunting Task to Reach 55% Degree Attainment

Figure 12 looks at the total picture of degrees andcerticates (not just bachelors degrees), constructing ascenario using the model adapted by California Competes.

Under this scenario, the state would have to take hugestrides on several dimensions of performance just toreach three-fths of the way to the 55% attainment goal chosen to make California more competitive with the topstates. And presumably, while California is making thesestrides, the states we are watching are improving as well, ineffect moving the goalpost.

California Competes has adapted a national model to demonstrate how various changes in college-goingpatterns and college completion could increase the numbers of Californians with degrees and certicates.As with all models, this one confronts data limitations and contains myriad assumptions that affect how thescenarios inuence the numbers of degrees and certicates that result. It also becomes dated as the numberof years until the 2025 target shrink. Without delving into details or assumptions, one may use the model tosuggest the magnitude of the challenges and the relative contributions of some possible actions. One samplescenario is provided here to illustrate that a set of very signicant improvements would take us only three-fths of the way to the stated goal:

Attainment goal for 2025: 55%* (currently 39%)

Additional degrees need: 2,271,611**

Additional degrees and certificates from following scenario: 1,370,536

1. Close half of the gap with the average of the three top-performing states in three aspects of college readinessand participation: high school graduation rates (California ranks 37th), rate of college going directly from highschool (California ranks 29th), and college participation rates of 20-39 year olds (California ranks 6th).

2. Close half the gap in annual completions per enrollment (California ranks 45th) with the average of the threetop-performing states.

3. Change distribution of enrollment of new high school graduates (2% more enrolling at UC; 3% more at CSU;1% more at privates; 6% fewer at CCC)

* 25-64 year olds with associate degree or higher

** Above what present trends would yield in bachelors and associate degrees

What the projection models make clear, as do datapresented earlier in this report and in the companionreport, Average Wont Do , is that the current system is not

structured to meet such aggressive goals. Still, Californiacan signicantly increase educational attainment levels ifeach segment takes advantage of its own unique roles andopportunities to help educate many more Californians.We turn next to describing high-leverage priority areas forimprovement across the three segments and illustrate itwith an ambitious but realistic growth scenario.

Source: http://californiacompetes.org/wp-content/uploads/ca_studentowmodel.swf


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Segment Roles and OpportunitiesCalifornia Community Colleges. As the largest segment,the CCC has the largest role, as well as the greatestopportunity, to increase annual numbers of Californiansearning degrees and certicates. Students who entercommunity college well prepared graduate at high rates.Successful implementation of the Common Core StateStandards could increase the readiness of incomingCCC students, in turn increasing numbers of graduates. The new associate degrees for transfer provide anotheropportunity to increase graduates. There is an evengreater opportunity for growth in career-orientedassociate degrees and certicates because these havenot, until recently, been a major priority of the system.

California State University. As the provider ofapproximately one-half of the bachelors degrees in thestate, the CSU also can be expected to make a majorcontribution to increasing the number of graduates.Graduation rates for regional universities are low,nationally, and CSU is not alone in making it a priorityto increase those rates and to reduce time-to-degree,making room for additional students. Major gains ingraduation numbers at CSU can also be expected tocome from improvements in college readiness as a resultof school standards reform and from easing capacitycontraints to allow more high school graduates toenroll directly in the CSU, with appropriate supports toaddress readiness issues. As the new associate degrees

for transfer take hold, increasing numbers of transferstudents should move expeditiously to completion.

University of California. UC cannot be expectedto contribute as much to the growth in numbers ofCalifornians with bachelors degrees. Its graduation ratesare high and its undergraduate enrollments are low,relative to the other two segments. UCs contributionsto overall state needs could be expected to come frommoderate increases in undergraduate enrollment andtherefore in bachelors degree recipients, from addressingthe structural cost issues noted above to help setappropriate priorities for undergraduate education andresearch, and in reducing the gaps between racial/ethnicpopulations in college going and college completion.

Figure 13 reects these different opportunities andexpectations for the segments to contribute to thegrowth in degrees and certicates. It shows howbachelors degrees could increase over present trends ifUCs annual average growth in degrees increased from3% to 5% and if CSUs annual average growth in degreesincreased from 2.9% to 8% between now and 2025. Thegraph also displays a similar set of projections for theCCC, contrasting annual rates of growth in associatedegrees and certicates of 10% and 15%, respectively, totheir current average growth rates of 2.8% and 7.7%. Thisscenario is ambitious but potentially achievable becauseit is based on an assessment and application of the bestopportunities for gains.

Figure 13Projected Growth in Degrees and Certificates, Current and Targeted Rates of Growth

Source: Authors projections based on data on past degree production from the CCC Datamart, CSU Analytic Studies, and UC Accountability Reportand InfoCenter

Annual Bachelors Degrees(at current growth rates)

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Annual Associate Degrees and Certicates(at targeted growth rates)

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According to our calculations (see Appendix), thisgrowth scenario would yield about 280,000 additionalbachelors degrees and about 640,000 additional

associate degrees and certicates compared to whatcould be expected with a continuation of present trends. This scenario, while ambitious, still falls short of the PPICand California Competes degree targets, implying thatthe gap would have to be lled by other providers or bymore striking changes in the structure and operation ofthe public sector. The Appendix displays a third scenariounder which each public segment increases its annualgrowth in degrees by an additional 5%, and shows theremaining, although smaller, gap to be lled by otherproviders to reach the 55% attainment numbers.

The private sector. All of these scenarios suggest thatthe independent sector (private, nonprot) in Californiashould also be considered as a potential contributorof additional bachelors degrees. That sector alreadyprovides a signicant share of bachelors degrees whichthe state helps subsidize by providing CalGrants tostudents attending private colleges and universities. The for-prot sector has become a very signicantplayer in offering vocational degrees and certicates. That sector could become part of the overall solution

for addressing vocational credentials, provided thatconcerns about quality are addressed through betterregulation. In addition to the potential capacityprovided by current private institutions, it may benecessary to consider new approaches to credentialingaltogether, such as some have suggested, drawing onnew forms of collaboration and new understandings ofdetermining and validating competency.

Whatever the combination of public and privateproviders, of existing and new models, efforts to increasethe number of Californians with college credentials

cannot be just a numbers game. Californias highereducation institutions must continuously affirm theacademic quality and relevance of all certicate anddegree programs, and must ensure that the programsare meeting the needs of the state and its varied regionsfor skilled and educated citizens and workers. Assessingprogram quality and relevance is a complex undertakingwith few easy answers, but institutions must work todene desired student learning outcomes and ndcommon ways to understand whether students areachieving them.


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PART II: A New Approach to Meet CaliforniasHigher Education NeedsA Model Public Agenda This sec tion presents a new approach to determiningCalifornias higher education needs and respondingeffectively to them. The approach attempts to strikea balance between the scal realities of today andthe possibilities of a tomorrow that will support moresubstantial investment in the education of Californiansbased on sound planning and the cost-effective use ofresources. The typical process of developing a publicagenda is for a states official higher education entity, beit a board, commission, or department, to lead a processof stakeholder engagement. But California is one of onlytwo states that lack such an entity. As an alternative, wehave drawn upon expert opinion and analysis, includinga rich set of reports that collectively reect broadstakeholder input (see methods box).

We intend for this model public agenda to inspire broadstakeholder discussion about the future of Californiahigher education a discussion that moves us beyonddebates about whether and how to restore an oldervision. Instead, we have constructed a new vision on thefoundations of a developing consensus (see Resources at the end of this repor t). We hope that discussionsabout the vision will lead to an official public agenda forCalifornia higher education that can begin, as soon aspossible, to guide and support the changes that are sourgently needed.

The model public agenda is centered on four simplebut critically important goals, addressing access andattainment, equity, affordability and efficiency, and statepolicy leadership. Each goal can be realized by a set ofcommitments from lawmakers, educators, and othersdedicated to a healthy and competitive state. Togetherthese goals and commitments can be the basis for a

revitalized system of higher education in California.

Goal 1: Increase access to higher education institutionsand attainment of high-quality degrees and certicates,with an emphasis on access and attainment amongyounger adults.

Commitments needed to reach this goal:

n Increase college and career readiness of enteringstudents;

n Improve outcomes of entering students who are notyet ready for college-level learning;

n Increase completion of certicates and degrees andachievement of other meaningful skill improvementsvalued in the workplace;

n Better align degree and credential programs with thestates economic, workforce, and civic needs; and

n Ensure high quality student learning.

Methods and Sources for thisModel Public Agenda

1. Reviewed performance data for California andother states

2. Conducted interviews with experts on statepolicy leadership and planning

3. Studied other states public agendas

4. Reviewed published reports on Californiapostsecondary education (see Resources at endof document)

5. Analyzed selected scenarios for setting samplegoals and targets.


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Goal 2: Reduce performance gaps in higher educationaccess and attainment.

Commitments needed to reach this goal:

n Reduce disparities in college and career readiness,college participation, college completion, andeducational attainment across racial/ethnicpopulations, income groups, and regions; and

n Use advancements in educational technology toensure that students have access to higher educationoptions not available in their region.

Goal 3: Improve the stability and adequacy of public andprivate investments in higher education.

Commitments needed to meet this goal:

n Ensure that students have affordable access to highereducation with predictable tuition levels; and

n Ensure that taxpayers investment in higher educationis rewarded with efficient, effective, and equitableoutcomes that meet individual, social, and economicneeds.

Goal 4: Provide state policy leadership that enables an

effective regional approach to meeting Californias highereducation needs, connected to an overall state-level vision.

Commitments needed to meet this goal:

n Ensure that appropriate parties are accountable forsetting reasonable and equitable targets that cancollectively meet regional and state needs and closeperformance gaps;

n Ensure that regions and constituent institutions havethe nancial and human resources they need to make

reasonable progress toward their targets and goals;and

n Align policies with identied needs and desiredoutcomes to promote effective and efficient use ofCalifornias investments in higher education.

A Regional Approach to HigherEducation

It would be difficult, if not impossible, for the three publicsegments to achieve the above goals and commitmentsabsent signicant changes in state policy and planning.All three segments and the K-12 public school systemhave worked hard to increase readiness, access, studentsuccess, and equity, but none has been successfulenough given the scope of Californias challenges.Certainly, the lack of resources during the states recenteconomic recession created a harsh scal environmentwhere improvement was all but impossible. But aswe discussed earlier, nancial resources are not the

only problem. Numerous structural problems preventCalifornias higher education system from assessingpublic needs and executing a coordinated, strategic planfor meeting them.

We suggest that California instead needs a three-part strategy of regionalism, specialization, andtechnology in order to meet these commitments andachieve these goals. Such a strategy requires leadershipand collaborative mechanisms that currently do not exist.

Regionalism. A regional consortium would be

established for each region of the state to devise cross-sector strategies to increase college and career readiness,college access, and college completion. (Variousdenitions of region exist, so a rst step would be todetermine an appropriate set of regions.) The consortiumwould comprise all public and private postsecondaryeducation institutions within the region, representativesof K-12, perhaps through the county offices of education,and major regional employers. A primary provider oflabor market information would be designated by thestate for each region. Each regional consortium would be

required to develop a plan that:

n Sets forth the higher education needs of the region,with targets for college and career readiness, targetsfor numbers of degrees and certicates, generally,and in key elds, and targets to close performancegaps across racial/ethnic groups;

PART II: A New Approach to Meet CaliforniasHigher Education Needs


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n Identies the roles of the institutions within theregion for meeting the regional targets, includingthe number and types of programs each institution

would offer and estimates of degrees and certicatesthey would award annually;

n Reects a common understanding of college andcareer readiness, and alignment of s trategies andpolicies for meeting readiness goals;

n Demonstrates that each institution has developedpathways within each program for students to followthat would facilitate timely completion; and

n Provides a spectrum of work-based learning

opportunities from high school through university,as a key contribution of employer participation in theconsortium.

Specialization. The plan would designate areas ofprogram specialization for each higher educationinstitution to eliminate unnecessary duplication acrossthe region, build on institutional strengths to deliver themost cost-effective instructional approaches, and meetunmet needs. By drawing on the distinctive capabilitiesof each college and university to address the uniqueneeds of each region, each regional consortium canserve students effectively and use resources strategically.Effective specialization would entail setting prioritieswithin and across segments and might lead to some newinstitutional models such as:

n Technical colleges that award associate of appliedscience degrees and well-structured career pathwaysof industry-recognized certicates, developed incooperation with regional employers;

n Universities that prioritize applied technical and other

STEM disciplines and align pathways with technicaland applied associate degree programs;

n Institutions or programs within institutions modeled onthe Accelerated Studies in Associate Programs (ASAP)in the City University of New York that offer highlystructured programs for low-income students; and

n Institutions designed expressly to serve working adults.

Technology. A key component of each consortiumsplan would be to identify how technology wouldbe used purposefully and effectively to ensure that

students maintain access to a broad complement ofacademic pathways regardless of what may be offeredat their home institutions. As examples, a small ruralcommunity college might not have a range of generaleducation offerings or some courses required forstudents to transfer in particular majors. Students inthat college could access those needed courses throughonline instruction. These same online courses could beaccessed by a CSU or UC student whose home campushad been designated to focus on other programmaticpriorities. A region could decide to offer high-volume

general education courses online to ensure sufficientcapacity across institutions in the region. Institutionswould be expected to use online education strategically;not all students and courses are equally well-suited toonline platforms. And when less academically preparedstudents participate in online education, institutionswould clearly identify the supports that faculty andstudents would receive.

These three elements would be mutually reinforcing.Regional analysis and planning would illuminate the role of

each institution in a particular regional economy and wouldprovide focus and direction to guide institutional growthand areas for specialization. Innovations in technology,primarily online instruction, have a clear purpose in thismodel, as they would permit institutions to specialize, whilemaintaining broad access to comprehensive educationalpathways for students in the region.

In contrast to this new vision, our current state-centricmodel has proven overwhelmed by the vast differencesacross regions and the tension between constrainedresources and growing expectations. Some region-basedplanning has emerged out of necessity, but it is sporadicand has no formal place in state policy or planning. Somedifferentiation across campuses within each segment hasoccurred, but the cookie cutter approach still prevails,with each campus or college competing for enrollmentand funding and aspiring to fulll the comprehensiveexpression of its systems mission as best as it can,given its resources. This state-centric model is neithernancially sustainable nor best for students.


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17 | INSTIT UTE FOR HIGHER EDUCATION LEADERSHIP & POLICY AT CALIFORNIA STATE UNIVERSITY, SACRAMENTO


Finance Policy in the Regional Model The state and the segments all have critical roles to play indeveloping the nance policy to support the translation

of regional needs into state-level policies and budgetallocations.

The public colleges and universities would collaboratewithin each regional consortium to identify their roles inproviding cost-effective education to meet regional needs.Judging cost-effectiveness would require the segments tomodify their scal accounting and reporting practices, inaccordance with denitions adopted by the state. Segmentleaders would then roll up the regional plans into theirsystemwide budget requests and align their subsequent

campus allocations with the regional plans.

The state would be responsible for translating betweenregional needs and state allocations and for developingcoherent scal policies to advance the goals of the publicagenda. The major state functions are described briey here.

Establish funding stream for regional consortia. Thestate would need to establish a funding stream forthe formation and operation of the regional consortia,including for the provider of regional labor marketinformation for each region.

Adopt and require common, recognized denitionsand accounting procedures. A new approach to budgetplanning would be needed, one that shifts from a focuson cost per enrollment in each segment to the cost ofproducing the desired outcomes in the regions. This wouldrequire information, not currently collected or reported,on the cost to educate undergraduate students in eachsegment, as well as to subsidize their education in privateinstitutions. For example, it has always been assumed thatit is least expensive to educate undergraduates in the CCC

because the state provides so much less per student tothe CCC than to either university system. But the costs percompletion are not compared, in part because CSU andUC have not reported undergraduate costs separately. Thecommon denitions developed by the Delta Cost Projectand incorporated into the regular reporting of the NationalCenter for Education Statistics could facilitate this approachto scal planning.

Collect and analyze nance data to translate regionalneeds to state-level budgets. The state would draw onthe work of the regional consortia to determine cost-

effective enrollment and allocation strategies to meetthe states overall attainment goals. The regional plansand their costs would be translated to budgets for thesegments. Additionally, regional planning may identifythe need for private institutions or other providers toaccommodate additional students, serve populationsnot being well served by public institutions, or fulllintermediary functions to connect with employers andworkforce entities. If these activities and organizationsare part of an overall plan to meet state goals throughregional collaboration, they may warrant state subsidies

as part of the higher education budget.

Develop a coherent policy framework. The statewould have ultimate responsibility for developing acoherent state policy framework for ensuring nancialstability for institutions and families across the regions.A coordinated approach to appropriations, tuition,and nancial aid policies, based on sound regionalplanning, would allow for better alignment of resourceswith desired outcomes. For example, the state couldincorporate incentives into the appropriations to

regional consortia to increase the participation andsuccess of low-income and other at-risk populations. To complement the appropriations strategy, the statecould provide at-risk students with incentives for makingtimely progression toward graduation through tuitionpricing and nancial aid policies. Appropriations andtuition would be set in the context of reasonable sharingof costs between students and the state. State nancialaid would take into account the total cost of attendance(not just tuition) and would be provided on an equitablebasis to allow students with nancial need to afford

their desired educational programs. This would requirea simplication of todays maze of CalGrant optionsthat treat students differently in each segment and areill-suited to supporting shorter-term but costly technicalprograms. It would also require revisiting the assumptionthat low fees ensure an affordable community collegeeducation. Finally, it would require consolidating orintegrating the new middle class scholarship programwith other state and institutional aid.


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Monitor the impact of scal incentives. In developingstate nance policy the state would be cognizant ofthe incentives embedded in the policies, with the goal

of aligning incentives with the goals of the plan foraccess, attainment, equity, affordability, and stability.An important role of the state would be to monitor theimpact of the scal policies to ensure they are providing

appropriate incentives and to guard against unintendedconsequences such as curtailing access by disadvantagedpopulations or discouraging the offering of higher-cost

but valuable programs.Monitor indicators of nancial health. The state wouldbe responsible for dening, collecting, and monitoringthe set of indicators listed in Figure 14.

Figure 14Indicators of Progress for Achieving Financial Health in Higher Education

At different levels of the system, different indicators of progress are needed to analyze performance and trends. The following metrics would be used at the state, segment, and regional level to track the effectiveness of the

new regional approach in achieving nancial health.

State level: At this level, an executive branch office would monitor the following indicators of progress andreport annually on them to the governor and legislature.

State Effort

n Percent of state general fund budget devoted to higher educationn State appropriations for higher education per FTEn State appropriations for higher education per capitan Student share and state share of Education and Related (E&R) spending in each segment

Affordability

n Share of family income required to pay for college (tuition, room, board, less nancial aid), by incomequintile, by sector (two-year, four-year)

n Net price of college (total costs minus grant aid) for grant recipientsn Average level of student debt upon graduation

Regional level: Each regional consortium would monitor the following indicators of progress and reportannually on them to the state.

n Spending per student: total E&R expenditures in all public regional institutions per FTE in the regionn Cost per degree: total E&R expenditures in all public regional institutions per degree/certicate awarded in

the region

Segment level: Each public higher education segment would monitor the following indicators of progressand report annually on them to the state.

n E&R spending per FTE student, broken out by undergraduate and graduate, and by disciplinen Portion of budget devoted to E&Rn E&R spending per degree/certicaten Total credit hours in a year divided by total completions in the year (efficiency metric)


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19 | INSTIT UTE FOR HIGHER EDUCATION LEADERSHIP & POLICY AT CALIFORNIA STATE UNIVERSI TY, SACRAMENTO


Accountability in the Regional ModelIn the new model, accountability would be a sharedresponsibility of institutions, regional consortia, andstate lawmakers. With resource allocations more clearlybased on regional plans and targets, and developed withbetter knowledge of costs, the segments and the regionalconsortia would be better able to explain their budgetrequests to lawmakers, to account for the use of resources,and to report on outcomes. Equally important, institutions,families, and all Californians would be better able to holdlawmakers accountable for providing needed resources.

Each consortium would be accountable to the statefor setting and meeting regional targets with respectto readiness, enrollment, and attainment and forimplementing the key tenets of increased specializationand the technology to support it. Regional consortiawould be accountable as well for ensuring the quality oflearning across the region. Accordingly, each consortiumwould designate a team of faculty and staff from withinthe consortium whose mission it is to identify or respondto problem areas and provide appropriate assistance tomember institutions. The team would draw on availableinformation such as accreditation reports and programreviews to stay abreast of any developing quality concerns.

The state would be responsible for setting overallexpectations for the performance of the segments andfor guiding and monitoring regional and state targets forperformance. The major state accountability functions aredescribed briey here.

Setting expectations for growth in degrees andcerticates from each segment. The ambitious butachievable scenario for annual growth in degrees and

certicates, displayed in Figure 13, is an example of howthe state would set expectations for the segments thatreect needs and opportunities for improvement. Thestate would look to the community colleges for majorincreases in certicates and degrees, with a heightenedpriority on career credentials to serve the needs ofregions. Following the lead of 48 states whose two-yearcolleges offer applied associate degrees, the state maydetermine that such degrees are a necessary part of theCCC repertoire to meet regional needs. The state wouldlook to the CSU to enroll and graduate signicantly

more students, continuing its successful efforts to helpunder-prepared students become quickly ready forcollege-level learning. Following the nding of the PublicPolicy Institute of California that allowing more highschool graduates to go directly to a university wouldincrease numbers of bachelors degree recipients whileincreasing under-represented minorities at UC and CSU,the state might modify current policy accordingly andmonitor the impact on regional targets and enrollments. The state would expect major improvements in four-year graduation rates and in units-to-degree at the CSU

to open up capacity for serving additional students.Expectations for UC would be for moderate enrollmentincreases and major gains in access and success by under-represented minorities.

Setting benchmarks for state-level performance onkey indicators. The state would set targets for keyareas of improvement as a benchmark for both guidingregional targets and assessing their viability. Figure 15shows one possible set of targets for ve key measures ofperformance where California performs poorly. The targets

shown are computed to close one-half of the gap with thetop-performing states. This is ambitious but potentiallyachievable for reasons detailed in the Appendix.


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Figure 15Sample Targets for Priority Performance Areas, to Close Gaps with Leading States

Current Performance2020

Sample Target2025

Sample Target

AG Completion*

WhiteBlack Latino

45%29%28%

51%38%38%

55%44%44%

Direct College Entry 62% 68% 72%

Undergraduate Awards Per 100 FTE

Undergraduate Students EnrolledUniversity of CaliforniaCalifornia State UniversityCalifornia Community Colleges

24.122.110.4

24.523.514.7

24.824.517.8

Bachelors Degrees Awarded per 1,000Population Ages 18-24

42.7 56.1 65.6

Attainment (associate degree or higher)for Ages 25-34

38% 42% 45%

*Not comparable with other states; target would close half of gap with White students.


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Figure 16Indicators of Progress for Increasing Higher Education Access, Attainment, and for Closing Gaps

In order to track the effectiveness of individual regions and hold the regional consortia and constituentinstitutions accountable, the state would monitor the following metrics and report annually on them to theGovernor and Legislature.

n Preparation: share of 11th graders meeting college readiness standards in English/math, high schoolgraduation rates, share of high school graduates completing a g

n Participation: share of high school graduates going directly to college

n Student progress: persistence rates, share of entering undergraduates who complete college-level English/math course within one year, share of entering students completing 24 semester credits within one year,annual number and percent change in CCC transfers to UC/CSU/private universities, CCC transfer rates

n Completion: annual number and percent change in awards (certicates [by length] and associate for CCC,bachelors for UC/CSU), bachelors degrees awarded per 1,000 residents ages 18-24, graduation rates

n Attainment: share of population age 25-34 and 25-64 with associate degree or higher and with bachelorsdegree or higher

n Quality/Learning: licensure/certication rates, job placement/retention

n All of the above indicators disaggregated by key racial/ethnic groups and income groups and reported byregions of the state

Monitoring regional target-setting and annualoutcomes to ensure that, collectively, regional targetswould meet state goals. Targets such as those shown in

Figure 15 and other metrics shown below would be setat the state level as a basis for assessing the viability andambition of regional plans and targets. If the regionalplans would collectively fall short of state-level targets,the regions would be expected to make adjustments. The state would also review and assess all of theregional readiness, enrollment, and completion targetsto see if they are on track to closing the gaps acrosssubpopulations within each region and across regions ofthe state.

Adjusting state policies as needed to support regional plans for increased specialization and use of technologyto ensure broad access to instructional offerings. If

the regions were to encounter regulatory barriers tomaking some of the required shifts toward increasedspecialization of mission and program, and towardincreased use of technology to deliver instruction, thestate would take the lead in revising state policies tobetter support the work of the regions.

Monitoring indicators of progress for meeting publicagenda goals. The state would be responsible fordening, collecting, and monitoring the set of indicatorsshown in Figure 16.


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Effective State Policy Leadership for aRegional Model

Strong, capable, and informed policy leadership at thestate level is essential for this new vision to take hold. The regional consortia would set goals and targets andassign regional institutional responsibilities for meetingtargets, but a state entity would need to fulll the criticaland supportive ongoing state role described abovewith respect to nance and accountability. This fu

a new vision for california higher education: a model public agenda

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