Completion – Page 5 – Public Policy Institute of California

College Graduates and California’s Future

The University of California Board of Regents invited Mark Baldassare, PPIC president and CEO, and Hans Johnson, PPIC senior fellow and director of the PPIC Higher Education Center, to present their perspectives on the role of higher education in California’s future, November 16, 2017. Here are their prepared remarks:

Good morning, I am Mark Baldassare, president and CEO of the Public Policy Institute of California (PPIC). I am here with my colleague and PPIC’s higher education center director Hans Johnson to present the institute’s research findings on the need for college graduates in California’s future economy. To kick off this session, I am going to make a few remarks about public opinion to place this issue in perspective.

The November PPIC Statewide Survey points to the importance of this topic for most Californians. Eighty percent of California adults say that the state’s higher education system is very important to the quality of life and economic vitality of the state, and another 14% say it is somewhat important. Strong majorities across political, regional, racial/ethnic, and demographic groups say that the state’s higher education system is very important. In fact, strong majorities of Californians have been saying that higher education is very important to the state’s future since we first asked this question in 2007.

In the context of the 2018 governor’s race, 63% of California adults say that candidate positions on higher education are very important, and another 28% say they are somewhat important to them. Majorities across political, regional, racial/ethnic, and demographic groups hold this view.

When asked about the current workforce, 83% of Californians say that a four-year degree from a college and university prepares someone very well (30%) and somewhat well (53%) for a well-paying job in today’s economy. Fifty percent of Californians think that a college education is necessary for a person to be successful in today’s work world, with majorities of Latinos (67%), Asian Americans (54%), and African Americans (51%) and fewer whites (35%) holding this view. Moreover, about half of Californians, with pluralities across the state’s major regions, say that California will not have the college-educated residents needed for the jobs and skills likely to be in demand 20 years from now.

In sum, the importance of a higher education and the need for college graduates are issues on the minds of many residents today. Hans will provide the demographic and workforce analysis that demonstrates why the state’s higher education system is essential for a better future for all Californians.

PPIC has produced a series of reports on California’s future population and economy. Our report Will California Run Out of College Graduates? provides projections of the demand for and supply of workers across all levels of educational attainment to 2030. Our primary finding is that California faces a shortage of highly educated workers. Specifically, economic projections to 2030 show that about two in five jobs will require at least a bachelor’s degree, while demographic projections suggest only about one in three Californians will have at least a bachelor’s degree. This shortfall equates to 1.1 million workers.

In this presentation, I first describe how California’s population and economy are changing and then identify how the state and its higher education institutions can increase college enrollment and completion to produce more college graduates.

California’s economy increasingly demands highly educated workers

To develop our economic projections, we apply trends in educational attainment levels to occupational projections developed by the California Employment Development Department. We examine changes in labor market demand that are occurring due to shifts both in occupational structure and changes in educational attainment within occupations. Our primary finding is that the state’s economy will continue along a well-established trajectory, with a growing share of jobs requiring at least a bachelor’s degree.

There are two key drivers of increasing demand for college graduates: (1) faster growth in occupations that commonly require a college degree (e.g., computer technology), and (2) increases in demand for highly educated workers within occupations (e.g., nursing). In recent years, most (74%) of the increased demand for highly educated workers has occurred because of faster job growth in occupations that commonly require a college degree. Among occupations with at least 100,000 full-time year-round workers, there have been especially rapid growth rates for software developers (56% increase between 2010 and 2015), computer scientists and systems analysts (42% increase), and managers (35% increase). These and other highly skilled occupations have experienced faster growth than most occupations that require lower levels of education.

That said, the increase in educational attainment within occupations has been significant. For example, the share of registered nurses with a bachelor’s degree has grown from 57% in 2000 to 68% in 2015. From 2010 to 2015, about 26% of the increase in jobs for college graduates was attributable to growing demand for highly educated workers within specific occupations.

Are college degrees really necessary for these jobs? To answer this question, we examined a number of labor market outcomes. Within and across occupations, we find that workers with bachelor’s degrees have higher labor force participation rates, lower unemployment rates, and higher wages than those without—and that, in general, as educational attainment increases, wages also increase. Overall, the wage premium for college graduates relative to less-educated workers has grown. By 2015, the average annual wage for full-time year-round workers was more than twice as high for workers with a bachelor’s degree than for those with only a high school diploma.

Within each of 51 occupational groupings we see higher wages for college graduates than for high school graduates. Among registered nurses, for example, those with a bachelor’s degree earned 12% more than those with an associate degree.

California’s educational institutions are not keeping up with demand

Too few Californians are graduating from college. At current college enrollment and completion rates, only 30.5% of 9th graders in California will eventually earn a bachelor’s degree either in California or elsewhere in the United States. Among all states, California ranks 47th in the share of high school graduates who enroll in four-year colleges and 5th in the share who go to community colleges. Low rates of transfer from community colleges to four-year colleges exacerbate the problem.

A critical challenge is the retirement of the baby boom generation. Called the “silver tsunami” by some, this is the first time in California’s history that such a large and well-educated group is exiting the labor force. In contrast, the number of young adults in California is projected to increase only modestly.

Not all degrees are equal

On average, college graduates have very strong labor market outcomes. At any point in time, some college graduates are working in jobs that do not necessarily require a college degree, but over the course of their careers the vast majority of college graduates will move into occupations that reward their educational training. Our estimates show that students who earn bachelor’s degrees in engineering and computer science fare very well in the labor market, but even those with less remunerative majors, such as education and the liberal arts, will earn far more in wages than less-educated workers, even after taking into account all the costs of going to college.

How to close the degree gap

To close the degree gap, California and its higher education institutions need to establish new policies and practices to enroll more students, especially in our four-year colleges and universities, and improve graduation rates among students already in college. In previous testimony, PPIC has identified targets for each of the state’s public systems with respect to admission, transfer (from community colleges to four-year colleges), and improved graduation rates.

The University of California (UC) will play a central role. In our scenario, UC would need to award approximately one-quarter of the additional degrees necessary to close the gap. This is an ambitious target, but the increase over current levels (and over the baseline projection) would not be without precedent. For example, between the 1999–2000 and 2016–17 academic years, the number of bachelor’s degrees awarded by UC increased 62% (from slightly more than 33,000 to almost 54,000). Our closing-the-gap scenario would require UC to award about 81,000 degrees by 2029–30, a 51% increase over current levels.

Improving access and success among groups historically underrepresented in higher education—including low-income students, first-generation college students, Latinos, and African Americans—is essential if we are to close the degree gap. Compared to other public research universities, UC has an impressive record in enrolling low-income and first-generation students.

The California State University (CSU) system and the California Community College system have adopted new goals that are entirely consistent with PPIC’s targets. New initiatives, including remediation reform at the community colleges and at CSU, have the potential to substantially improve student success rates. CSU’s new graduation initiative aims to increase graduation rates and eliminate gaps between groups of students. College preparation among the state’s high school graduates has also increased, with the share of students completing the college preparatory requirements of UC and CSU reaching an all-time high. Strong demand for UC is likely to continue as college preparation continues to improve and the transfer pathway is better articulated. UC has seen consistent increases in graduation rates for many years, and new efforts to improve on-time graduation are likely to continue this trend.

Finding ways to accommodate all these students remains a central challenge, but one we must meet in order to ensure a better future for all Californians.

Testimony: The Need for College Graduates in California’s Future Economy

Hans Johnson, director and senior fellow at the PPIC Higher Education Center, testified today, November 1, 2017, before the Assembly Select Committee on the Master Plan for Higher Education in California. The master plan defined a strategy to meet the state’s education needs in 1960—but today, California faces new challenges. The topic of today’s hearing: ensuring that the master plan meets workforce needs.

Here are his prepared remarks.

PPIC has produced a series of reports on California’s future population and economy. Our report Will California Run Out of College Graduates?, provides projections of the demand for and supply of workers by educational attainment to 2030. Our primary finding is that California faces a shortage of highly educated workers. Specifically, economic projections to 2030 show that about two in five jobs will require at least a bachelor’s degree, while demographic projections suggest only about one in three Californians will have at least a bachelor’s degree. This shortfall equates to 1.1 million workers.

In this testimony, I first describe how California’s population and economy are changing, and then identify how the state and its higher education institutions can increase college enrollment and completion to produce more college graduates.

California’s economy is increasingly demanding highly educated workers

To develop our economic projections, we apply trends in educational attainment levels within occupations to occupational projections developed by the California Employment Development Department. We examine changes in labor market demand that are occurring due to shifts in the distribution of occupations and changes in educational attainment within occupations. Our primary finding is that the state’s economy will continue along a well-established trajectory, with a growing share of jobs requiring at least a bachelor’s degree.

The two key drivers of increasing demand for college graduates are: 1) faster growth in occupations that commonly require a college degree (e.g., computer technology occupations), and 2) increases in demand for highly educated workers within occupations (e.g., nursing). While both drivers are important, in recent years most of the increased demand (74%) for highly educated workers has occurred because of faster job growth in occupations that commonly require a college degree. Among large occupations (with at least 100,000 full-time year-round workers), those with especially rapid growth rates over the past five years include software developers (56% increase between 2010 and 2015), computer scientists and systems analysts (42% increase), and managers (35% increase). These and other highly skilled occupations have experienced faster growth than most less skilled occupations.

The second key driver of demand has been an increase in educational attainment within occupations. For example, the share of registered nurses with a bachelor’s degree has grown from 57% in 2000 to 68% in 2015. Altogether, over a five year period (from 2010 to 2015) about 26% of the increase in jobs for college graduates has occurred as demand for highly educated workers has grown within specific occupations.

Are college degrees really necessary for these jobs? We examine a number of labor market outcomes to answer this question. Within and across occupations, we find higher labor force participation rates, lower unemployment rates, and higher wages for workers with a bachelor’s degree than for those without. And in general, as educational attainment increases, wages also increase. Overall, the wage premium for college graduates relative to less educated workers has grown. By 2015, the average annual wage for full-time year-round workers was more than twice as high for workers with a bachelor’s degree than for those with a high school diploma.

California’s educational institutions are not keeping up with demand

Too few Californians are graduating from college. At current college enrollment and completion rates, only 30.5% of 9th graders in California will eventually earn a bachelor’s degree either in California or elsewhere in the United States. Compared to other states, California ranks 47th in the share of high school graduates that enroll in four-year colleges and 5th in the share that go to community colleges. Low rates of transfer from community colleges to four-year colleges exacerbates the problem.

A critical challenge is the retirement of the large and relatively well-educated baby boom. Called the “silver tsunami” by some, this aging out of the labor force of millions of older adults is the first time in the history of California that such a large and well-educated group is exiting the labor force. In contrast, the number of young adults in California is projected to increase only modestly.

Not all degrees are equal

On average, college graduates have very strong labor market outcomes. While at any point in time, some college graduates are working in jobs that do not necessarily require a college degree, over the course of their careers the vast majority of college graduates will move into occupations that reward their educational training. Our estimates show that students who earn bachelor’s degree in engineering and computer science fare very well in the labor market, but even those in less remunerative majors such as education and the liberal arts will still earn far more in wages than less educated workers, even after taking into account all the costs of going to college.

How to close the degree gap

To close the gap, California and its higher education institutions will need to establish new policies and practices to enroll more students, especially in our four-year colleges and universities, and ensure greater success of students already in college. In previous testimony, PPIC has identified targets for each of the state’s public systems with respect to admission, transfer (from community colleges to four-year colleges), and improved graduation rates. Improving access and success among groups historically underrepresented in higher education, including low-income students, first-generation college students, Latinos, and African Americans is essential if we are to close the degree gap.

The good news is that new goals adopted by the California State University (CSU) system and the California Community College system are entirely consistent with PPIC’s identified targets. New initiatives, including remediation reform at the community colleges and at CSU, have the potential to substantially increase student success. CSU’s new graduation initiative aims to substantially increase graduation rates and eliminate gaps between groups of students. Strong increases in college preparation among the state’s high school graduates are also a positive sign, with the share of students completing the college preparatory requirements of UC and CSU reaching an all-time high.

Finding ways to accommodate all these students remains a central challenge, but one we must meet in order to ensure a better future for all Californians.

Learn moreVisit the PPIC Higher Education Center

Video: Reforming Remedial Math in Community College

Developmental—or remedial—education is one of the largest barriers to student success in California’s community colleges. The good news is that reforms are underway, and a new report by the Public Policy Institute of California (PPIC) looks at the effectiveness of some of these reforms in math. PPIC researcher Olga Rodriguez presented the report in Sacramento this week. One reform the researchers studied is an alternative to traditional algebra-based courses and is designed for students in majors—particularly those in the liberal arts and humanities—that require only statistics. The report finds that students in this statistics sequence substantially outperform their peers who take traditional developmental math.

In a discussion following the presentation, panelists addressed the issue of why this math alternative is not more widely available. Myra Snell, math professor at Los Medanos College and cofounder of the California Acceleration Project, said the reasons range from the logistical to the cultural. Most math professors are not trained in statistics. Further, there is a deeply held belief among faculty that intermediate algebra is essential. She said that this “gets in the way of them rethinking what might be best for students.”

Laura Metune, vice chancellor of external relations at the California Community Colleges Chancellor’s Office, noted the necessary shift in emphasis from encouraging campuses to try multiple interventions to investing in alternatives with the best chance of helping more students achieve their academic goals.

Nikki Edgecombe, senior research scientist at the Community College Research Center at Teachers College, Columbia University, noted: “If we know that students who are completing a statistics-level pathway are completing their transfer-level math at a significantly higher rate, but we hold on to the old system as well, it’s safe to say we’re doing a lot of students a disservice.”

She continued: “To be honest, there are a lot of bad ideas out there. We need to have the moral courage to identify what those are and fashion solutions for students.”

Learn more

Read the report Reforming Math Pathways at California Community Colleges
Visit the PPIC Higher Education Center

Reforming Remedial Education in Community College

Reforming developmental, or remedial, education is essential to improving student outcomes in community colleges. Why? Developmental education is supposed to help underprepared students, but currently it may be one of the largest impediments to success. As PPIC research has shown, 80 percent of incoming California community college students—and a disproportionate share of students of color—enroll in at least one developmental course, but relatively few successfully move on to complete a college-level course. The good news is that over the last few years, there has been a tremendous amount of support for reform.

Reforming Assessment and Placement
Assessment and placement reforms generally involve moving away from the traditional reliance on standardized tests and toward a more holistic measure of prior achievement such as high school course grades. Research finds that test-based assessment and placement policies assign many students into remediation unnecessarily. Indeed, students’ high school performance as measured by GPA and course grades—even when self-reported by students—is a much more accurate indication of student readiness. A recent report by the California Acceleration Project shows that the use of high school measures has dramatically broadened access to and completion of college-level math and English courses, significantly reduced equity gaps, and has had little impact on course success rates.

But implementation is key. Several decisions will determine the impact of new policies in increasing access to college-level courses and reducing unnecessary remediation: What GPA or course grades will qualify a student for access to college-level courses? If a college uses multiple measures, how will they be combined into a single placement decision? Will colleges accept students’ self-reports of their GPA and grades? Furthermore, as campuses expand access to college-level courses, it is critical that they provide supports to students who need to brush up on their math or English skills. Guidance provided by the Multiple Measures Assessment Project, the California Acceleration Project, and others will be central to helping colleges make these important decisions.

Reforming Developmental Courses
Changes to developmental coursework can also help more students progress to college-level courses. Some colleges are transforming traditional developmental education into accelerated pathways that are relevant to students’ programs of study using the design principles of guided pathways introduced by Bailey, Jaggars, and Jenkins, which allow colleges to cluster hundreds of programs of study into a handful of broad areas (e.g., liberal arts, STEM, business, and health). For example, in math, there are statistics, quantitative reasoning, and STEM/precalculus pathways. In English, reforms often entail integrating reading and writing courses and contextualizing classes within broad fields of study. Additionally, colleges have shortened developmental pathways or offered concurrent support courses instead of requiring students to take prerequisites. This reduces the number of students who drop out because they fail to reenroll in long developmental course sequences, while providing just-in-time support to help students succeed in college-level work.

Across the state, PPIC has found that a growing number of developmental education reforms are underway—led by the California Acceleration Project and the Carnegie Foundation, among others. These initiatives are well positioned to implement reforms using the guided pathways framework. Emerging research suggests that providing accelerated math pathways that are more aligned with students’ programs of study helps improve early academic outcomes, including completion of college-level math. Less is known about the impact of developmental English reforms on student outcomes, but recent evidence on compressed and co-requisite English courses is encouraging.

Research and Policy Opportunities
Support for developmental education reform and guided pathways at community colleges has been spearheaded by the multimillion-dollar investments made through the Community College Chancellor’s Office, the governor’s annual budget, and legislative proposals, including AB 705 and SB 539. As colleges continue to adopt and scale placement and course reforms, it will be imperative to assess students’ perspectives and outcomes to determine if new policies improve student success and reduce equity gaps.

Learn more
Read the report Preparing Students for Success in California’s Community Colleges
Visit the PPIC Higher Education Center

CSU Ends Remedial Courses

Last fall, more than one in three students starting as freshmen at the California State University (CSU) system had to take a remedial course in either English or math before they could take college-level courses in those subjects. These remedial courses generally cover material from high school and don’t count toward a degree—even though they cost the same amount and require as much class time as a college course. But this situation is about to change. Starting in 2018, all CSU freshmen will be placed in college-level courses. Those who are underprepared will receive some kind of extra support.

This is the most recent in a series of CSU reforms intended to place freshmen students into college-level courses. In 2004, the Early Assessment Program (EAP) began giving 11th graders an indication of their readiness for CSU and identified the courses they would need to complete their senior year to avoid remediation. More recently, incoming students who were required to take remediation were enrolled in Early Start, which used summer courses to prepare students for college coursework in the fall. The elimination of all remedial courses is a big change: while previous programs aimed to prepare students for college-level work before their freshmen year, CSU will now focus on helping students complete college-level work regardless of their preparation.

This policy change comes as CSU embarks on its new graduation initiative, whose goal is to raise graduation rates and close achievement gaps by 2025. What kind of impact might the elimination of remedial courses have on college completion? Students who require remediation in one or more subjects are about half as likely to graduate within four years as their peers who are ready for college-level work. The share of CSU students identified as needing remediation has been dropping for some time, and as remediation rates have fallen, six-year and four-year graduation rates have increased.

The general decline in remediation indicates that students have become better prepared over time, either in K–12 or through programs like Early Start. Though eliminating remediation will not affect how prepared students are when they start college, there is still reason to believe CSU could see an increase in graduation rates. As PPIC’s study of community college remediation showed, long remedial course sequences leave students many points of exit and can be barriers to success. Indeed, about 13% of CSU students who entered remediation in 2015 failed to complete remediation and were not at the university by their second year. With the end of remediation at CSU, students will have fewer potential exit points, they will be able to earn more college credits in their first year, and many may experience more success in college-level courses due to additional support. These potential benefits could help more students graduate and shorten their time to degree.

In addition to eliminating remediation, CSU is making changes to the Early Start program and course placement policies to further prepare students and help them find the right classes. These changes could help narrow the graduation gap between races. In 2016, only about 18% of white CSU students required some form of remediation, while about half of Latino and about 60% of African American students needed remediation in at least one subject. If these new policies do increase graduation rates, many traditionally underserved students may benefit.

Learn more

Visit the PPIC Higher Education Center
Read the PPIC report Preparing Students for Success in California’s Community Colleges

Is College Worth it? What Graduates Say

As college registration deadlines approach, thousands of Californians are making important decisions to invest in their education and long-term career prospects. The vast majority of parents (85%) hope their child earns at least a bachelor’s degree, according to the PPIC Statewide Survey. But how do graduates see it? And how well-informed are their decisions?

The good news is that most people who earn degrees believe their investment was worth it. According to national survey data, 71% of those who earned an associate degree and 73% of those with a bachelor’s degree agree their education was worth the cost. Going beyond the economic value, a large share also find engagement in the work they do. In fact, a sizeable share of associate- and bachelor’s-degree holders report deep interest in their work (41% and 38%, respectively) or say that they have the ideal job (29% and 26%, respectively).

Although having an “ideal job” may be a very high bar to achieve, these results suggest that a majority of degree earners are not terribly satisfied or engaged with their work. Indeed, in a wider-ranging national survey conducted recently, a majority of college graduates indicate that they would change their degree, their college, or their major if they could do it again. Among associate-degree holders, 23% would seek a different degree—more than double the share of bachelor’s-degree holders who say the same. But graduates with bachelor’s degrees are not entirely satisfied with their choices either: 40% would study a different major (compared to 36% among associate-degree holders). And the survey finds curiously similar responses regardless of a person’s income level. Though higher-income Americans are slightly less likely to regret their college choices, a large fraction of them (35–45% for those with income over $100,000) would still make a different choice.

These results confirm that while college pays off, there is room to improve how well-informed prospective students are about their colleges, majors, and degrees. On this blog, we’ve written about the economic value of college credentials and how it varies across fields of study. We’ve also highlighted the need for data to inform student choices, given the sizeable financial commitment entailed.

Among the state’s public colleges and universities, California’s community colleges are ahead of the curve in providing information online about institutional performance, future salary, and more. Other institutions should follow suit. However, the survey results above suggest it is perhaps equally important to design courses and programs that ensure students can efficiently and effectively identify the degrees and majors best suited to them. Indeed, this is one of the tenets of the guided pathways movement taking place at community colleges across the country and in California. To inform and improve the college decisions of Californians, it is critical that these practices expand beyond community colleges, so that K–12 schools and four-year universities are also working to ensure students have comprehensive information when choosing their pathway into a career.

Learn more

Visit the PPIC Higher Education Center

Federal Policy Shift on Private For-Profit Schools

The US Department of Education is moving toward changing two regulations designed to protect students at private for-profit institutions. The regulations were revised or instituted by the Obama administration in response to allegations of fraud and predatory practices, as well as low graduation rates and high levels of student debt. Secretary Betsy DeVos says they are burdensome for institutions.

The regulations cover more than 250 private for-profit institutions in California; they affect about 245,000 current students and tens of thousands of former students.

DeVos is establishing rulemaking committees to review both regulations:

The Borrower Defense to Repayment (BDR) allows victims of misleading and predatory practices to apply for federal loan forgiveness. California attorney general Xavier Becerra says that about 38,000 Californians who took out loans to attend Corinthian Colleges (which shut down in 2015) are eligible to file claims. DeVos stated that approved BDR claims will be paid and pending ones will be processed while the regulation is under review. However, it’s unclear if students can still apply for loan forgiveness.
The Gainful Employment (GE) regulation is designed to help students avoid low-performing schools. It requires institutions to provide students with information on graduation rates, average earnings of graduates, and average federal student loan debt. The most important aspect of the regulation is the federal student aid qualification component, which stipulates that loan payments for graduates of postsecondary programs should not exceed 8% of annual earnings or 20% of discretionary income. Programs that do not meet these standards risk losing the ability to participate in federal student aid programs. According to Federal Student Aid data, in 2015 only 58% of programs at Californian for-profit institutions met the 8% benchmark, compared to 97% of programs at public and private not-for-profit institutions. The share of for-profits passing the discretionary income test is even lower, at 34% (public and not-for-profit schools have a passing rate of 82%). It is unclear if the GE regulations will be enforced while the committee reviews the regulation over the next two years.

While the federal government is taking steps to pull back on the regulation of for-profit institutions, California is moving in the opposite direction. In order for students at higher education institutions to qualify for Cal Grants, the institutions must meet minimum standards for graduation and loan default rates. In 2014, 137 institutions—almost all of them private for-profits—failed to meet California’s standards. In 2017, however, only 10 failed, which suggests that the policy might be working. Furthermore, California has joined 17 other states in suing DeVos over her decision.

As the Department of Education reviews these regulations, it should evaluate the effect the changes could have on student debt and loan default rates. In the meantime, keeping the current regulations in place would protect students from low-performing schools and help them avoid programs that may lead to high levels of debt and low-paying jobs.

Learn more

Visit the PPIC Higher Education Center

College Graduates Have Higher Net Worth

Compared to less educated adults, college graduates generally see much stronger labor market outcomes, including greater labor force participation, more employment, and higher wages. This holds true across every demographic group—age, gender, ethnicity, and nativity. These differences are well-measured and well-documented.

But what about wealth? Wealth is one of the most important indicators of economic well-being, but it is difficult to measure and therefore information on wealth is much less widely available. Using recently released data from the US Census Bureau’s Survey of Income and Program Participation (SIPP), PPIC has developed new estimates of wealth for Californians. We focus on household net worth, the difference in value between all assets (including retirement accounts, savings accounts, investments, and real estate) and all liabilities (including mortgages, loans, and credit card debt).

The estimates show that Californians are wealthier than adults in the rest of the nation. In 2013, median household net worth among adults age 25 and over was $135,000 in California compared to $105,000 in the rest of the United States. While many have expressed growing concern about income inequality, the distribution of wealth is even more uneven—a fact that is especially apparent when we examine wealth by educational attainment. In California, median household net worth is almost four times higher for adults with at least a bachelor’s degree ($356,000) than for high school graduates ($95,000). (In the rest of the nation, the difference is slightly more than threefold.) One in four college graduates in California is a millionaire, compared to one in fourteen high school graduates.

For most people, wealth accumulates over time. As college graduates consistently earn relatively high incomes year after year, their wealth grows. One in five young college graduates (age 25–34) in California has negative net worth—meaning they have more debt, including student loan debt, than assets. But over time, debt recedes and wealth increases. Among college graduates who recently retired (those age 65–74) in California, half are millionaires.

Higher education has long been key to economic progress for individuals and for the state. In future research, PPIC will explore the role of higher education in promoting social and economic mobility. Ensuring that higher education continues to put people on the path toward economic well-being is a central policy issue.

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Read Higher Education in California: Addressing California’s Skills Gap
Visit the PPIC Higher Education Center

Regional Action to Boost College Success

California needs 1.1 million more workers with bachelor’s degrees by 2030 to keep up with economic demand, PPIC research has found. Three regions will play an especially critical role in addressing this challenge: Los Angeles County, the Inland Empire, and the San Joaquin Valley.

Improving college enrollment and graduation rates in these regions could help close more than half of this projected statewide skills gap, according to a new PPIC report, Meeting California’s Need for College Graduates: A Regional Perspective. It analyzes the challenges ahead and recommends ways to meet them. At a Sacramento event, report coauthor Kevin Cook summarized the findings and a panel of experts described promising initiatives already underway in these regions. Report coauthor Hans Johnson, director of the PPIC Higher Education Center, moderated the panel discussion.

Panelist Benjamin Duran, executive director of the Central Valley Higher Education Consortium, said his group has created a partnership of public and private colleges and universities, as well as community college districts, from Kern through San Joaquin Counties. One of the consortium’s projects involves improving remedial education, which has traditionally consisted of non-transferable classes that delay—and all too often end—students’ college careers. Under the newer approach championed by the consortium, students deemed underprepared for college work are able to enroll in college-level courses right away but also get supplementary support.

The Central Valley consortium is also working to encourage more students—particularly those in the community colleges—to take 15 units per semester or 30 per year so that more of them graduate on time. “When you’re able to go to school full time, the research is showing that you’re far less likely to drop out—you’re going to finish quicker,” Duran said.

Alma Salazar, senior vice president of the Center for Education Excellence and Talent Development at the Los Angeles Area Chamber of Commerce, said, “We do what all great organizations do—we take someone else’s idea and try to make it better.” The result, she said, is the L.A. Compact, modeled after an effort in Boston. It is a collaboration among area organizations, educational institutions, unions, and local government leaders. The focus is on three goals:

All students graduate from high school;
All students have access to and are prepared for success in college; and
All students have access to pathways to sustainable jobs and careers.

Ken O’Donnell, associate vice president of the Student Success Program Integration and Assessment at California State University, Dominguez Hills, talked about his campus’s success in improving its six-year graduation rate from about 30% to 42% in a few years. O’Donnell echoed the PPIC report, which finds that improving success rates for those already in college will have the greatest impact on the statewide skills gap. “You’ve already improved capacity without adding a single additional seat,” he said.

Learn more

Read the report Meeting California’s Need for College Graduates: A Regional Perspective
Visit the PPIC Higher Education Center

California is Still Golden for College Graduates

Over the past 15 years, 1.5 million more people have left California than have moved here from other states, according to estimates from the California Department of Finance. Remarkably, even in the face of this outflow, California still experiences net gains of college graduates (those with at least a bachelor’s degree). Over the past five years, California ranks second among all states in net gains of college graduates from other states, even as it ranks first in net losses of less educated adults.

From a demographic perspective, these patterns are unprecedented. In contrast to California, other states that gain large numbers of college graduates, such as Texas and Florida, also gain large numbers of less-educated residents. And states that lose large numbers of less-educated residents, such as New York and Illinois, also lose large numbers of college graduates. California is unique in gaining large numbers of college graduates while losing large numbers of less educated adults.

Why does California have such disparate migration patterns? People move across state lines for many reasons, but primary among them are jobs, housing, and family. California’s strong labor market for highly educated workers attracts college graduates from other states, while the state’s high cost of housing is especially hard on workers with less education and lower incomes.

California will face a large skills gap by 2030—it will be 1.1 million college educated workers short of economic demand if current trends in the demand for skilled workers and the educational attainment of the state’s population continue. Can migration fill this gap? No, but it can help. However, in 2015–16 the University of California awarded more than 50,000 bachelor’s degrees, the California State University awarded more than 90,000, and private non-profit colleges in California awarded almost 40,000—much more than the average annual migration gain of about 20,000 college graduates.

The best way to close the skills gap is to prepare more Californians for the economy of the future. The state can increase the number of home-grown college graduates by focusing on college readiness in K–12 schools, improving completion and transfer rates at all the state’s higher education institutions, and expanding access to four-year colleges. By taking action now, the state can realize big benefits in the future: higher incomes, more tax revenue, less demand for social services, and greater economic mobility.

Learn more

Read California’s Future: Higher Education
Visit the PPIC Higher Education Center