Addressing Capacity Shortfalls at California’s Universities

Complete report

Reforms undertaken by California in the past decade to improve academic performance and prepare students to attend four-year universities are paying off: More students are graduating from high school than ever before, and more of them have completed college preparatory classes. In addition, growing numbers of community college students are earning the credits needed to transfer and continue their higher education. But even as we celebrate that success, tens of thousands of qualified students are being turned away from California’s public universities each year. The University of California and California State University are unable to accommodate the increased demand. The capacity shortfall has become a crisis. 

By failing to serve an increasing number of eligible students, California is squandering hard-won gains and undermining public trust. Improvements at all levels of the state’s education system have been driven by recognition that the state’s future prosperity depends on closing equity gaps and increasing the number of students earning four-year degrees. Education is a critical factor in significantly boosting a family’s socioeconomic status for generations to come. In an increasingly global, high-tech economy, a college degree improves the chances for obtaining a job with livable wages. But increasing capacity challenges at these universities could threaten the state’s economic future and widen racial, income, and geographic inequities. 

By 2030, the state is projected to have a shortfall of about 1.1 million workers with a bachelor’s degree. 1 At least 60 percent of California’s K–12 students are from underserved groups that have had historically low rates of college success. 2 Meeting the projected shortage of skilled workers depends on dramatically raising the rates of college success for students from low-income families and communities of color. Tens of thousands of qualified students are being turned away from California’s public universities each year.

The capacity challenges at universities, however, disproportionately impact students from groups that are underrepresented in college. Some of the largest capacity gaps in California are in regions with high percentages of low-income families and communities of color. Many students already face formidable socioeconomic barriers and cannot afford additional burdens. When earning a baccalaureate degree requires moving to another region or state, these students are largely left behind. Yet these students and the state have the most to gain if they earn a degree—and the most to lose if they do not. To support a thoughtful and productive conversation about how to leverage the state’s resources, strengths, and assets, College Futures Foundation commissioned a study of postsecondary capacity issues by McKinsey & Company, a consulting firm that conducts qualitative and quantitative analysis to guide strategy and planning. The analysis examined capacity at the California Community Colleges, the University of California, the California State University, and the Association of Independent California Colleges and Universities (private schools).

This report lays out the scope of capacity challenges through the next decade, details the economic and social implications, and outlines potential solutions.