Looking Ahead | Access to Excellence | CSU
Access To Excellence2008 Full Report

Looking Ahead: The Strategic Context for Leadership in
The California State University

The major social, economic, and political forces that shape this plan are in some respects continuations of the themes of the past decade. At the state level, the years now in view will be a time characterized by population growth and demographic change, rapidly changing technologies, and workforce transition. These years will also be a time of continuing fiscal challenges to publicly funded institutions, as demands on state funds will continue to squeeze discretionary spending for higher education. And these years will be a time of sweeping change for all of higher education, as technology will continue to expand capacity to meet new populations, and to change traditional ways of doing the work of teaching, research, and service.

Many of these internal and external trends are well-recognized by the CSU, and policies are in place to manage them. Even so, there are key differences between the past and the future, because of demographic and economic transitions, and changes in institutional capacity to meet them. Understanding these changes and their consequences for the role of the CSU is essential to setting the agenda for the strategic management of the institution in the years ahead.

Growth and Growing Diversity
California’s population will continue to grow, to an estimated 43 million by 2020, with most of the increase in the Central Valley and the southern part of the state and among Latino populations. Even without increases in high school graduation or college-going rates, budgeted enrollments in the CSU are projected to grow at an average annual rate of slightly over 2.5 percent per year, or roughly 10,000 new students each year, a number larger than the enrollment of seven of the CSU campuses in 2006.2 Moreover, if efforts to increase college-going rates succeed to any significant degree, the demand for places in the CSU will far exceed such projected growth. In any case, CSU students will continue to come from predominantly low- and middle-income families, and will face real economic hurdles in being able to access higher education. At the same time, the educational needs of different regions of the state will increasingly diverge, because of regional demographic differences and distinctive regional employer and community needs.

Aging Population
California has historically been a “young” state by national standards, but that also will be changing. Starting in roughly 2011, when the baby boom generation reaches retirement age, the proportion of the population aged 65 and higher will be growing faster than the number of working-age Californians, by as much as 70 percent overall between 2011 and 2020. As a result, workforce shortages are expected to occur in several regions and industries, and that shortfall will be most acute among scientists and engineers and in the helping professions, including teaching, nursing, allied health fields, and care for the elderly. These needs are unlikely to be met exclusively by new workers; they will require much more attention to continuing education and retraining, including postbaccalaureate short courses, professional education, and graduate education.3

The aging population will also put greater pressure on funds for public support systems, particularly in health care, already the fastest-growing part of the state budget. It will also add to personnel expenses for major employers (including the CSU), as growth in payouts for retiree benefits will place demands on resources that otherwise might go to current workers.

Internationalism and the Knowledge Economy
The world has shrunk and has “flattened” since Cornerstones was adopted. The Internet, in particular, has dramatically lowered the cost of transporting ideas and the fruits of talent from anywhere on the planet to anywhere else. To be competitive, businesses and organizations need to work collaboratively with partners and entities both within and beyond national boundaries, and be capable of competing not only locally, but globally.

It is internationally recognized that educated, analytical, creative, and productive people are the essential resources that nations need to advance their economic development, maintain competitiveness, build social cohesion, and ensure civic success. The positive returns from investment in higher education are well documented in greater workforce productivity, advances in technology, higher tax revenues, reduced spending on social programs, and a more engaged citizenry.4 Many countries have made growth in postsecondary education a central part of their national agendas. The results are telling: among Organisation for Economic Cooperation and Development (OECD) countries, postsecondary participation rates increased an average of 36 percent in just the 1995–2003 period, and have more than doubled in China, Korea, and India.5

Growing Workforce Requirements for Postsecondary Degree Attainment One consequence of the growing knowledge economy is that greater proportions of the population now need access to some form of postsecondary education. Individuals with just high school diplomas have sharply fewer viable options for sustainable employment. Instead, a postsecondary degree is now necessary, and more than ever jobs require some type of postsecondary degree or training. Degree requirements for information-age jobs increasingly extend to master’s and professional degrees, and continuing education. Continuing adult education for refreshing of skills, applied masters programs, and professional degrees and certificates will also be in high demand.

Opinion research shows that the public understands this. Recent research from Public Agenda shows a dramatic change in just the last seven years in public perceptions about the importance of a college degree.6 In 2000, when asked if a college education was necessary to get ahead, 31 percent of a national sample said yes, compared to 67 percent who believed that people could find other ways to get ahead. In 2007, the same question found a majority now believing that college is necessary for success—a 20 point change in just seven years. Perhaps of sharper concern, 62 percent of the public also think that qualified students do not have the opportunity to attend college—up from 57 percent seven years ago.

Long accustomed to being considered first in the world for the reputation of its higher education system, the United States is now eighth among OECD nations in the proportion of the adult population that has attained a college degree. The need to increase postsecondary educational attainment to maintain economic competitiveness was a major theme in the 2007 report of the United States Secretary of Education’s National Commission on the future of higher education. However, this priority has yet to be translated to new initiatives to increase capacity for higher education in our country.

Instead, the United States faces an anomaly of stagnant or even declining levels of educational attainment even though enrollments are increasing. The explanation is that postsecondary enrollment growth is just keeping pace with overall population growth, while high school graduation rates are falling, most dramatically among males, students from low-income families, and the new immigrant populations who comprise the majority of American young people. Overcoming this stagnation will depend predominantly upon increasing success among Latino and African American student groups, from high school through college graduation.

This challenge is nowhere more starkly presented than in California, where fully two-thirds of new college enrollments in years ahead will come from Latino populations currently underrepresented in higher education.7 Student achievement and persistence gaps begin in elementary school and repeat themselves across the educational pipeline: in graduation from high school; in transitions from high school to college attendance, in community college transfer to four-year institutions; in baccalaureate degree attainment; and in attainment of graduate and professional degrees. The result is that California is now last among all 50 U.S. states in the proportion of African American and Latino students who make it from ninth grade to a baccalaureate degree.8

Left in place, these educational deficits will translate into debilitating economic and social gaps for the state, and growing inequality in access to health care, housing, and other aspects of social mobility.

In order to close degree attainment gaps and meet workforce needs, California must nearly double its current rate of college degree attainment in the next 15 years—an increase of nearly 130,000 degrees awarded on top of current levels of production.9 Some of this gap can be closed by increasing college transfer and baccalaureate attainment among students who currently leave college without completing the degree. But the problem cannot be solved through action by postsecondary institutions alone. Increasing attainment levels and closing achievement gaps will require coordinated strategies across the entire educational pipeline. In California, this will challenge the basic foundation of the Master Plan for Higher Education, which is primarily focused on distributing to different segments of public higher education the students who are fully prepared to transition to college. A new statewide policy focus will be needed, built on increasing college readiness and demand, as well as creating greater capacity for higher education, and increasing access and attainment to substantially more Californians than in the past.

Quality of Social and Civic Life
Society’s needs for higher education are not confined to workforce needs. There is also need for individuals who can be community leaders, who live healthy lives of civic engagement, and who work to make our democratic institutions successful. Each generation faces challenges in maintaining the quality of civic and social life, but the challenges for California in the early 21st century—environmental; political; civic; social; and economic—are particularly vivid. The quality of life, in communities, in families, and in civic structures, needs nurturing by Californians who are able to contribute to effective social and political structures in a diverse and rapidly changing society. Some of this will result from more people having enough economic security to enjoy better health, longer lives, and more leisure time. Higher education can and will contribute to such positive change, because of the economic benefits that come from a college education. But it will also contribute through providing more individuals with the benefit of acculturation in successful, diverse civic communities. Higher educational institutions can contribute importantly to social and political improvement by more self-consciously asserting their responsibility to educate for democratic engagement, leadership in sustainability, altruism, service, problem-solving, and civility.

Continued Funding Challenges
These challenges are all the more severe because they are occurring at a time that California is having trouble finding resources to keep its commitment to the level of access envisioned in the Master Plan, much less to double degree attainment in the state. For the better part of the last decade, postsecondary education has received a dwindling share of public resources in California, as budgets for health care and for prisons have grown remarkably. The combination of funding constraints and enrollment increases has led to severe budget stress, and unwelcome but necessary tactics in response: freezes on enrollment; cuts in classes, faculty and staff; and student fee increases. These budget problems have not occurred because postsecondary education has become a low priority for the public. To the contrary, Americans support more educational opportunity and worry that qualified students are being denied access.10 But four decades of budgeting via ballot measures have left California lawmakers with a chronic imbalance between widely recognized priorities for support and the resources available to meet those priorities. Although higher education is widely regarded as an important strategic investment, it has not been elevated to the same level of urgency as other areas. In competition with K-12 education, health care, prisons, or emergency services, funding for higher education continues to receive lower priority.

California’s political leadership has tried to stabilize funding for higher education, through a series of negotiated compacts that commit the state to new resources for enrollment growth of 2.5 percent per year and predictable, if modest, annual general increases in base funding. The compact with the governor and the California Department of Finance has provided a welcome baseline for system and campus resource planning, but there are no guarantees. Even as this plan was being finalized in 2008, the state had declared another budget emergency, and was considering mid-year rescissions and funding cuts. Worse, as an obstacle to strategic planning, persistent structural problems in the state budget constituted a threat to stability in future funding for higher education.

2 California Postsecondary Education Commission, Combined Undergraduate Forecast, and the California Department of Finance, Graduate Enrollment Projections (2006).
3 See Brady, et. al., (2005), and Fountain, et. al. (2007).
4 See Economic and Social Returns, Solutions for Our Future, available at http://www.solutionsforourfuture.org also The Institute for Higher Education Policy, Reaping the Benefits, 1998.
5 See Apples and Oranges in the Flat World, American Council on Education, 2007. India, China and South Korea are not members of the OECD, so exact comparisons of levels of educational growth in these countries are not available in the same format as for OECD countries.
6 Squeeze Play, Public Agenda, 2007.
7 California Postsecondary Education Commission, Combined Undergraduate Forecast; DOF Graduate Enrollment Projections (CPEC, 2006). See also Brady, et. al., 2005; and Fountain et al., 2007.
8 NCHEMS, from Census data; 2000.
9 Jobs for the Future, 2007.
10 Squeeze Play, Public Agenda, 2007.