Executive Summary
California: The Changing Context
Tidal Wave II Revisited
The Original Projections
The 1994 Projections vs.Today's Reality
Accounting for the Growth
Updated Projections
How the Cohorts Have Changed
Is This a Tidal Wave?
Improving Projections
About the National Center

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California: The Changing Context

Three years have now passed since the original work by the panel, and these years produced startling changes in the state's fortunes. Higher education policy in the first half of this decade was marked by severe budgetary constraints that resulted in significant reductions in enrollment in California's three higher education segments: the University of California (UC), the California State University (CSU), and the California Community Colleges (CCC). The severe budget cuts were accompanied by declines in student financial aid, increases in student fees and a huge growth in student loans.

Total undergraduate enrollment declined by over 200,000 students (10.6%) from 1991 to 1995. Although all three segments were affected, the magnitudes and length of the decline varied. The University of California dropped the least; from the high point in 1991 to the low point in 1994, enrollment declined by almost 3,500 undergraduate students (2.8%). The enrollment decline at California State University began in 1990 and by 1994 totaled some 35,000 students (11.9%). Enrollment at the community colleges declined by 179,000 (11.8%) in the three years from 1991 to 1994.3

During this time, student fees were increased at an alarming rate to partially offset the loss of revenue, but this only exacerbated the access problem. The staggering economy created a fiscal squeeze that dramatically slowed and in some cases actually reversed the state's net in-migration pattern. The Department of Finance Demographic Research Unit lowered its projected numbers of high school graduates each year during that period as the expected in-migration to California failed to materialize. This was reflected in smaller cohorts than originally projected for virtually every year during the first half of the 1990s.

The policy discussion throughout this period focused on the bleak prospect that given the deteriorating economy, California's higher education system was in serious jeopardy. The state could not maintain its historic commitment to access under the constant onslaught of competing demands from other social services--health and welfare, childcare, K-12 education, and prisons among them. The four-year segments were understandably relieved when the governor entered into a four-year "compact" with them to provide a modest, but "guaranteed" 2% general fund increase in the first year (1995-96) and a 4% annual budget increase for each of the three subsequent years. This compact was designed to stem the tide of reductions and provide a "framework for budgetary stability."4 The agreement provided for enrollment growth of 1% annually, increases in student aid, and some modest productivity gains.

At the same time that the economy was reeling, student aspirations for higher education were apparently increasing. High school students were dropping out less, getting better grades, enrolling in college preparatory courses in greater numbers, taking more college placement tests, and successfully completing more advanced placement courses. In sum, aspirations were rising at the same time the paths to access were constricting.

What a difference a surging economy makes. In 1994-95 the recovery had just begun, but even the most optimistic scenarios did not foresee the kind of recovery that California has recently enjoyed. By 1998, California was awash with dollars and options. In the course of those three years the California economy rebounded so startlingly that the budget debate centered not on reductions this year, but on what to do with the second largest surplus in the state's history. The recurring policy split--whether excess revenue ought be used for tax reductions or increases in government services--was resolved when the parties agreed there were enough resources to do both.


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© 1998 The National Center for Public Policy and Higher Education

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