Over the next several years, the IET will publish a number of monographs on
subjects ranging from new decisionmaking tools for higher education leaders to
projections and analyses of demographic and fiscal trends. We will also report
on large and small means for improving efficiency and effectiveness in
postsecondary education. Finally, we will stimulate and participate in a
needed debate over what the higher education system should be like in the next
century--that is, why and how it should be redesigned.
It is appropriate to begin the series with several monographs that will support
the work of the California Education Roundtable, with whom RAND is
collaborating to revisit the assumptions of the California Master Plan for
Higher Education.
Near the start of the twenty-first century, it is timely and necessary to
rethink the purposes and design of California's higher education system.
Perhaps more than any other state's higher education system, this system
embodies the legacy of the Jeffersonian-based land grant model. The California
Master Plan (also known as the Kerr plan) articulated the most ambitious
postsecondary system yet developed:
- A community college system open to all high school graduates and adults
throughout their life
- A state university system (California State University) devoted to
high-quality undergraduate education that would enroll the top 33 percent of
high school graduates
- The University of California, open to the top 12.5 percent of high school
students.
Currently enrolling 1.6 million undergraduates, the three systems have an
enviable track record: CSU, for example, graduates 10 percent of the United
States' K-12 teachers. The recent National Academy of Sciences ranking placed
the University of California, Berkeley, at the top of all research universities
in the United States. UCLA, UC/San Diego, and UC/Irvine also won recognition
for many nationally ranked departments.
Nevertheless, a combination of factors warrants the reexamination of the
postsecondary sector in California. While the three public postsecondary
systems are still reeling from severe budget cuts imposed in the early 1990s,
even greater budget cuts may be in store in the next several years. At the
same time, the sector must somehow respond to what Clark Kerr calls "Tidal Wave
2," a dramatic increase in enrollment demand fueled by a more than 30 percent
increase in high school graduates, projected by 2002. Moreover, there is
increasing evidence that the quality of instruction is declining. And more
than 2,000 of the same faculty that formed much of the basis for the
superlative national rankings have taken early retirements offered by the
University of California as part of a cost-cutting effort.
The higher education sector in California is, in fact, being redesigned--but in
an episodic, piecemeal manner driven by the new fiscal limits the California
public sector faces. The question is whether a new strategic bargain can be
designed and agreed to by the state government, citizens, and the higher
education sector's leadership that will enable the next generation of high
school graduates to have the same opportunities for a high-quality
postsecondary education that recent generations of high school graduates have
enjoyed.
Can policymakers undertake the needed redesign of the higher education sector?
It is clear that the problems faced by the higher education sector in states
such as California are daunting.
However, the early history of higher education in the United States suggests
that the task is not impossible. Our leaders in the mid-nineteenth century,
spurred by Jefferson's arguments on behalf of public higher education, designed
the state-based land grant system that, in concert with strong private colleges
and universities, changed the face of higher education for more than a century.
It is only natural that after 100 years of operation, some restructuring is
needed. Are we really not up to redesigning the system our forefathers
invented for us? At the end of the twentieth century, the choices will be made
by higher education leaders or for them. The path taken matters
a great deal for the United States' role in the twenty-first century.
Leading off the Higher Education in the 21st Century series, Michael
Shires' monograph examines the probable effects of budget cuts on undergraduate
enrollment in California's postsecondary education and argues that the effects
make it imperative to revisit the Master Plan. His conclusions will stimulate
much needed discussion about how higher education might respond to the changed
environment he depicts. Shires' work was supported by a grant from the Lilly
Endowment, Inc.
Roger Benjamin
Director, Institute on Education and Training
Stephen Carroll
Senior Economist
Summary
In 1960, the state of California adopted the language of the California
Master Plan for Higher Education as its policy and strategy for higher
education. That plan had two major components: (1) it specified the roles and
missions of each of the four segments of the state's higher education sector,
and (2) it stated that each Californian who could benefit from higher education
should have access to it.
The Master Plan has successfully served as the model through which the state's
higher education sector has grown and thrived. This growth has in turn
provided the fuel for the state's economic engine and supplied the seed for the
growth of its high technology and aerospace sectors.
The Impact of Current Policies: Reduced Access
California's recent recession has had a major impact on the state's
three public university and college systems. It reduced the public sector's
capacity to provide undergraduate education through decreased funding, and it
decreased the demand for education as a result of increased fees and managed
enrollment strategies. Consequently, enrollments in these systems have dropped
in a period when the state population has continued to grow. The state's
ability to meet the Master Plan's access goal has been sharply reduced in this
period. The number of students actually served in 1994-95 declined by
more than 200,000 students from the number that would have attended had
participation remained at prerecessionary levels. This drop represents an 11
percent decrease in the overall level of service.
Access Deficits Will Grow in the Future
As the state economy begins to recover from the economic problems of the
early 1990s, the question arises, "Can the state return to the levels of access
envisioned in the Master Plan?" If so, then the state's higher education
systems should map out a strategy for accomplishing this goal and should enter
a compact with the state legislature to fund that plan. If not, then the
Master Plan as the document for shaping the sector should be revised to reflect
the realities that will shape the state's future.
This report is an effort to answer the fundamental question posed above.
This research shows that there is and will continue to be an access
crisis in California. The collision between the state's rising
demographic trends and its declining discretionary revenues (from which higher
education draws its resources) has resulted in a major shortfall in the number
of seats supplied, compared to the number of seats demanded--what is termed in
this report an access deficit.
The level of access is expected to decline from today's 89 percent of
prerecessionary levels to 62 percent in 2005-06 and to 56 percent in 2010-11.
Even in an optimistic fiscal scenario, the service levels would rise to only 65
and 58 percent for 2005-06 and 2010-11, respectively. This would be a marked
decrease in the level of higher education access provided in the state and
would eventually leave more than one million students unserved
in 2010-11.
Access Deficits Are Here to Stay
To close this deficit through increased state revenues, the higher
education sector would have to reverse its current trend toward a declining
share of state revenues and nearly double its share from about 10 percent today
to more than 18 percent in 2010-11. While that share is not unreasonably high
in historical terms, the increasing demands of the state's mandated spending
programs, such as K-12 education, corrections, and health and welfare programs
render it highly unlikely in the future. Given the fiscal context of the state
and the competition for discretionary resources, this scenario is extremely
unlikely.
Furthermore, California must also consider how to address the sector's capital
needs. Even if it could provide the faculty and operating resources, it must
have physical space for additional students. This analysis estimates that the
sector will require almost $16 billion dollars of bonded capital investment to
fund capital upgrades and expansion at an average annual cost (including
repairs and renovation) of $1.2 billion dollars.[1] This amount of new debt would severely
tax the state's capacity to issue debt. Experts in the state's bond markets
estimate that California's total annual new-issue capability is approximately
$2 billion per year. Between the demand for new prisons (driven by the "three
strikes" law[2]) and the need for new
K-12 facilities (which is driven by the same demographic forces as higher
education), there is certain to be aggressive competition for the $30 billion
that the state is capable of borrowing over the next 15 years.
Closing the access deficit through pure cost reductions is also problematic.
Consider that it would require reducing the cost of education by 70 percent to
close the deficits. Such a reduction is very unlikely. Because of the recent
major reductions in operating costs in all three systems, it is unlikely that
major productivity improvements can be made without seriously impacting the
quality of the education provided. This is not to say that progress cannot be
made in this area, as will be discussed in the recommendations for immediate
action below.
Implications for Higher Education
Because of the prospects of continued access deficits in California, two
actions are proposed. First, the state must commit to its investment in higher
education and the sector must find new ways of maximizing the state's return on
that investment. Second, the state must restate or readdress the Master Plan
in light of current and future realities. It can no longer provide the level
of access it envisioned in 1960, and some new guidance has to be given for
allocating the precious and scarce units of education that will be available in
the future.
New Investments and Higher Returns
Higher education is a crucial part of the success of the California
experience, and declining levels of access will have long-term negative
consequences for the state. The public commitment to the sector must be made
explicit and institutionalized, especially in light of competition from
mandated and constitutionally protected programs. In return, the state's three
public higher education systems and their constituent institutions must commit
to elevating the state's return on that public investment.
The state's higher education sector must restructure, across systems, across
campuses, across colleges, and across departments. It must reevaluate the
centuries-old models of governance and organization that currently define the
institution and develop new structures and alliances to provide education more
efficiently. It must also embrace new technologies and approaches to teaching
to maximize the productivity of its human and capital resources.
Revisiting Access Under the California Master Plan for
Higher Education
One conclusion is inescapable--the access goals of the California Master
Plan for Higher Education, in today's and tomorrow's fiscal and demographic
environments, are not viable given the state's current fiscal and demographic
trends. It is time for the state's policymakers to reconsider the Master Plan
and to develop a new strategy for the state's higher education systems.
The fact of the matter is that change is already happening but without a plan.
The state is de facto devising schemes for rationing access to education
through increased fees and other strategies. But instead of resulting from
well-considered, macro-level choices between alternative visions, the access
provided by the state's higher education sector is being shaped by a mishmash
of local factors and compounded by a highly uncertain budget picture. Students
are being explicitly kept out of the system by price increases. Capacity as a
share of demand is decreasing, with no explicit vision for higher education.
California appears to be in a state of denial regarding the ongoing viability
of the Master Plan. Budgets are no longer considered from the perspective of
what is required to support the needs of the state's higher education sector,
but rather of how much of the budget is left to be spent on it. And, whereas
there is a statewide concensus on the goals of the Master Plan, it is also
clear they are not currently being met. This analysis shows that they will
likely not be met in the future, either.
The time has come, therefore, for the state to convene a new Committee on the
Master Plan to address the state's goals for its public education sector into
the future. This Committee will need to consider
- The capabilities and the strategic role of the state's higher education
sector well into the next century
- The fiscal and demographic context in which the state's higher education
institutions must operate
- The strategic alliances between higher education as an education and
training
mechanism for the private sector as well as the sector's role in producing a
significant portion of the nation's basic research
- How to strengthen the linkages between the state's public and private
eduation sectors.
But the challenges of today are no more formidable than those of 35 years ago.
The current Master Plan was the product of a long process and the last in a
series of efforts to consider the structure and character of the state's higher
education sector. The new effort should likewise be the result of a carefully
considered process. Participation should come from all aspects of the higher
education sector and should include members of all four major higher education
segments (private institutions constituting the fourth), lawmakers, and other
leading policy players.
The current Master Plan is arguably a major reason for the state's tremendous
success over the past 35 years. A new Master Plan will be the key to the
state's next 35 years. The sooner such an effort can be undertaken, the sooner
the sector's goals and objectives can be redirected to springboard the state
into the next century.
The failure of the state to provide ongoing support to its higher education
systems will be a costly failure indeed. A significant share of the state's
burgeoning population will be denied access to higher education, and in an
increasingly technological society that demands an increasingly skilled
workforce, such short-term policy choices could well leave the state unable to
compete. Now is the time to act--to provide a sophisticated and thoughtful
plan for those systems--before the unfocused policies of the present result in
an unintentioned dismantling of a success that has taken 35 years to build and
before the effects of such a process ripple through the state's social
fabric.
[1] This amount is included in the "buy
out" costs described in the preceding paragraph.
[2] California's three-strikes law mandates 25 years to life
in prison for anyone convicted of a felony following two prior convictions for
serious crimes.
Contents
Chapter One: Introduction
California's Commitment to Access: The California Master Plan for Higher
Education
Other Research on This Topic
The Recession as a Turning Point
Approach of This Report
Organization of This Report
Chapter Two: California Higher Education Today: Many Fewer Students
Served
The Demand for Public Undergraduate Education
A Baseline for Comparison
Findings: The Recession Has Driven Enrollments Down Significantly
Chapter Three: California Higher Education Tomorrow: Access Deficits
A Growing Future Demand for Public Undergraduate Education
A Shrinking Future Supply of Public Undergraduate Education
Access Deficits: A Shortage of Public Undergraduate Education
Combining Demand and Supply Projections
Chapter Four: Prospects for Closing the Access Deficit
Will Better-Than-Expected Economic Growth Close the Gap?
Starting with the Goal
Funding the Access Deficit
Improving Efficiency to Close the Access Deficit
Some Preliminary Discussion of Other Policy Proposals
Chapter Five: Conclusions and Implications
Recent Policies Have Had a Major Impact
Access Deficits Are Here to Stay
The Implications of Sustained Access Deficits
Next Steps
Appendix
Bibliography
To order this document . . .
RAND's Home Page
RAND® is a registered trademark. Copyright © 1994-2012 RAND Corporation. Last Modified: September 17, 2010 Site Feedback »