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Accounting for the Growth

The remarkable resurgence of the California economy in the later half of the 1990s allowed state policymakers the luxury of fulfilling the essential commitment of the Master Plan. Absent the economic turn-around, the more pessimistic scenarios assuredly would have been closer to reality. Segments would have responded by reducing access even further in spite of all the cries of agony that may have ensued. This report would have featured an analysis of the access-gap and sounded the alarm for additional funds to close it. CPEC's baseline analysis, which was based on important assumptions consistent with the Master Plan would have been valuable, not so much as a predictor of enrollment, but as a way of identifying how California's investment in higher education had fallen short of Master Plan goals.

	Figure 4: Click for larger image

Of course, it is not just the economy that affects student enrollment levels; the state and the segments can respond in different ways to changes in revenue. The early 1990s reflected the policy responses that higher education institutions normally make in times of duress: enrollment was reduced, courses were cancelled and fees were sharply increased. The extent of the reductions can be eased by policies that promote productivity and result in additional spaces for students. Conversely, institutions may opt to maintain or even increase unit costs, decreasing access at a rate that is disproportionate to the rate by which funds have been reduced.

Figure 4 displays the change in enrollment as a percentage of total enrollments by segment. Note that the timing of the large-scale swings matches changes in economic conditions and policy decisions that were independent of student demand for higher education services. For example, the sharp declines in community college enrollments, where the variation is greatest, occurred with: the passage of Proposition 13 in the late 1970s; grading policy changes, the elimination of funding for avocational and recreational courses, and the first-time imposition of tuition in the early 1980s; and the elimination of support for courses enrolled in by bachelor degree recipients and the recession of the early 1990s.

Besides the economy and policy decisions, both of which affect the capacity of institutions to provide opportunity, there are two major variables that drive enrollments in higher education: the pool of students (i.e., the number of high school graduates and the size of various age groups, particularly the 18 to 24 year old cohort for UC and CSU) and participation rates (i.e., the percentages from those pools who enter higher education). For each of the three segments, different assumptions are made about the pools.

	Table 2: Click for larger image

The major difference between the UC and CPEC enrollment projections concerned assumptions about participation rates. In its 1994 projections the university expressed skepticism about an overall increase in participation rates as well as participation rate increases among the historically underrepresented African-American and Latino students. The university's earlier projections also expressed doubt that the decline in the numbers of high school graduates had bottomed out. CPEC argued for modest increases in overall participation rates, particularly for historically underrepresented populations. In fact, participation rates in the university have improved steadily since bottoming out in 1993.⁶ The university has subsequently altered its 1994 projections to display the increase in participation rates and the growth in the high school cohort generated by in-migration to the state, which has once again increased as the economy has improved. These latest, though unofficial, UC projections show a growth rate that is close to÷and actually slightly higher than - the CPEC 1994 baseline projections.

The community colleges' latest projections reflect a reduction of some 83,000 students from their earlier projections. These numbers are closer to the 1994 CPEC baseline projections, but are still higher by about 73,000 students.

The California State University utilizes the CPEC projections and has not updated its projections.

In sum, the adjustments made by both UC and the community colleges, the two segments that have developed independent updated projections, are now converging with the CPEC 1994 baseline projections.

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© 1998 The National Center for Public Policy and Higher Education