Zumeta Frankle, 2007

Zumeta Frankle, 2007
California Community Colleges
Making Them Stronger and More Affordable
By
William Zumeta and Deborah Frankle
March 2007
Prepared for The William and Flora Hewlett Foundation
By The National Center for Public Policy and Higher Education
The National Center for Public Policy and Higher Education
National Center Report #07–1
©2007 by The National Center for Public Policy and Higher Education
Table of Contents
Foreword .........................................................................................................................................iv
Executive Summary .......................................................................................................................vi
Introduction .....................................................................................................................................1
Key Issues and Questions ..............................................................................................................5
Non-Fee Dimensions of Affordability .........................................................................................7
How California Community College Students Finance Their Attendance .........................12
Are the California Community Colleges Taking Full Advantage of Available Financial
Aid to Make Attendance More Affordable? What Role Does Fee Policy Play? .............23
Fee Increases and Enrollments....................................................................................................31
The Role of Cal Grants .................................................................................................................41
Summary of Major Conclusions and Recommendations .......................................................46
Appendix A: Textbook Costs and Strategies to Contain Them .............................................53
Appendix B: Rough Cost Projections for Cal Grant and Fee Matching Funds Policy
Recommendations ..................................................................................................................57
References ......................................................................................................................................61
About the Authors ........................................................................................................................65
Acknowledgements ......................................................................................................................66
About the National Center for Public Policy and Higher Education ...................................68
iii
California Community Colleges
Foreword
Since the adoption of its Master Plan for Higher Education in 1960, California
has sought to provide an opportunity for higher education to all adults
who could benefit from it. The state’s community colleges serve as the
cornerstone of this policy and as the entry point to education and training
after high school, including academic degrees and workforce preparation.
These colleges now serve some 2.5 million Californians. To assure accessibility
to community colleges, California has relied primarily on geographical
proximity—having a college within commuting distance of most Californians.
And to assure affordability, the state has kept student fees or tuition to an
absolute minimum.
The need for accessible and affordable community colleges is more critical
than ever as California confronts the demographic and economic challenges
of the early 21st century. However, the strategies of the past may not be
sufficient to meet the needs of low-, or even moderate-, income students
who must finance their education and support themselves in regions with
some of the highest costs of living in the country. Today, the historical focus
on access and affordability must be reinforced by a renewed emphasis on
student success—on the attainment of students’ degree, certificate, and
employment objectives. Even if students have access to college, their success
is too often jeopardized by their need to work excessive hours to meet the
costs of housing, food, health care, childcare, transportation, textbooks, and
supplies. It is these essential living expenses that have risen most dramatically
in California and that comprise the current barrier to community college
affordability and student success. In short, the issue of community college
affordability must be broadened beyond the traditional preoccupation with
student fees. Higher education finance policy must place greater emphasis
on student financial aid from federal and state sources. And it must reinforce
this emphasis with stable fee policies that are related to the income of
Californians and that benefit students—not just the state treasury—when fees
are increased.
In California Community Colleges: Making Them Stronger and More Affordable,
William Zumeta and Deborah Frankle analyze the ways in which California
community college students pay for college and related expenses, as well
as the state policy and finance frameworks that both support and impede
iv
California Community Colleges
student success. Some of their recommendations for increasing student
success raise serious questions about the conventional wisdom around
community college affordability. Their analyses and proposals merit the
immediate attention of state policymakers and community college leaders.
William Zumeta is a senior fellow of the National Center for Public Policy
and Higher Education. He was in residence at the National Center during
2005–2006, when this study was conducted. Deborah Frankle was a policy
analyst at the National Center during the course of this study. This study was
conducted at the request of the William and Flora Hewlett Foundation. On
behalf of The National Center, I extend our appreciation to the authors for this
important contribution to a critical public policy issue and to the William and
Flora Hewlett Foundation for financial support of this project.
Patrick M. Callan
v
California Community Colleges
Executive Summary
The California Community Colleges (CCC) were created to provide
affordable access to high-quality education beyond high school for anyone
seeking to advance their careers, expand their knowledge, or improve their
opportunities through higher education. Forty years after their inception,
these institutions enroll more than two-thirds of California’s college students.
They are the primary entryway to higher education for the vast majority of
people, particularly for those with lower and modest incomes, as well as for
students of color in the state.
Over the past four decades, the importance of college has increased
dramatically, particularly in the last decade as the global, knowledge-based
economy began to have broader impact on the level of education needed for
individual success, community vigor, and statewide economic growth. Within
cycles of state budgets that have shifted between surplus and shortfall, many
California policymakers have sought to preserve the affordability of the CCC
system primarily by keeping fees low, and secondarily by seeking to develop
adequate levels of financial aid. During austere budget conditions, the CCC
system has sought to maintain quality and access even as fees were increased.
At this key juncture of global opportunity and competitiveness, it is
crucial to revisit the effectiveness of statewide policies in assisting the
community colleges in meeting their mandate for affordability and access in
light of today’s students and the public’s needs. For example:
• How effective are California’s strategies in assuring college
affordability, particularly for low-income Californians?
• What sources of financial aid do students use, particularly in
comparison with students in other states?
• What are the effects of recent state and systemwide policy changes,
such as revisions to the Cal Grant program, increases in fees and fee
waivers, efforts to enhance financial aid administrative capacity, and
budget cutbacks?
• How effective are the state’s recent efforts to inform students and
prospective students about state financial aid opportunities?
• How are financial aid and fee policies related, and how might they be
vi
California Community Colleges
modified to better meet student needs and maximize the impact of state
resources?
This report presents the findings and policy implications of six months of
research and analysis of these and other issues concerning the affordability of
the California Community Colleges for students and their families.
MAJOR FINDINGS
1. Affordability is a serious problem for many community college students,
and fees are not the main cause.
Fees represent less than 5% of the total attendance cost for the typical
community college student who is not living with parents and who is paying
fees. About 52% of full-time community college students (nearly 29% of all
community college students) have their fees waived due to financial need.
Non-fee attendance costs facing community college students have grown
much more rapidly than the state’s general cost of living in recent years. For
example, rental housing costs comprise the largest share of student budgets
and grew nearly 25% from 2000–2005 in California, compared with an overall
inflation rate of 16% in the state. Textbook and supply costs increased by 31%
during the same period. Costs for medical care and child care also outpaced
general inflation by a large margin, yet they are not adequately taken into
account in financial aid calculations.
2. Cal Grants are not keeping pace with student financial needs.
Access grants under Cal Grant B (the primary Cal Grant vehicle for assisting
community college students in paying for attendance costs beyond fees) have
fallen far behind the overall growth in attendance costs. The nominal value
of the access grants has increased just 15% over the past 20 years. Using the
California Consumer Price Index (which substantially understates the growth
in costs that college students face) to estimate the purchasing power today of
the original access grants created in 1969–1970, the maximum award would
today be worth $5,190 instead of the current $1,551. This inadequate aid level
discourages both enrollment and persistence of needy students.
Cal Grant Competitive awards are available to students several years
after high school graduation and have attracted a large number of applicants
vii
California Community Colleges
since their implementation in 2000–2001. However, the number of annual
new awards has not been increased since the program’s inception. Although
community college students received 77% of Competitive award offers in
2005–2006, this represents only 18% of eligible community college applicants
for these awards.
3. California and its students are missing out on substantial funding from
federal financial aid sources.
California community college students, compared with their peers in other
states, are substantially less likely to apply for and receive federal grants and
loans (as well as state grants), although their total costs of attendance are
comparable. More than half of full-time CCC students have unmet financial
need after their expected family contribution (EFC) and all aid are taken
into account. The unmet need is greatest among the lowest-income students.
Only about 15% of California community college students who are enrolled
for credit receive Pell Grants, compared with 25% of community college
students in other states. California students are even farther behind their
peers in access to federal loans: 6% compared with 17%. These aid receipt
gaps apply to both full- and part-time students and to students dependent on
parents as well as those who are independent. An important reason for these
gaps is the long-standing perception that low fees and fee waivers largely
eliminate affordability problems for California community college students, a
perception which has in turn led to insufficient attention to financial aid.
Because of federal Pell Grant rules that discourage very low tuition,
the latest community college fee reduction by the California Legislature,
which takes effect in spring semester 2007, will likely result in some $20
million annually in reduced Pell Grant support for some of the state’s
lowest-income students, according to estimates by the Legislative Analyst.
California students and families also forego substantial sums in federal tax
credits, which could be claimed if fees were higher, and then used to offset
educational costs.
One key consequence of inadequate aid is that the work commitments
of California community college students often come at the expense of their
education. Research shows that employment while in college negatively
affects grades and educational progress when work hours exceed 15 to 20
per week. In California, about 80% of community college students work,
and the average amount worked is 32 hours per week (23 hours for full-time
viii
California Community Colleges
dependent and 29 hours for full-time independent students; more for parttime students).
4. Statewide efforts to increase student use of federal financial aid have
resulted in modest improvements.
According to national survey data, California community college students’
participation in federal grant and loan programs (as well as in Cal Grants)
was modestly higher in 2003–2004 than in 1999–2000 (the previous year for
which this data was available). This is likely one result of the large infusion of
state funds for financial aid capacity building and outreach provided under
the Board Financial Assistance Program (BFAP) beginning in 2003–2004. The
CCC Chancellor’s Office reported a gain of about 20,000 in the number of
students receiving Pell Grants between 2002–2003 and 2004–2005 (latest year
available). While these trends are promising, they represent a gain from only
8.9% to 10.6% among students enrolled for credit, meaning that there is very
likely a large potential for additional growth (although not all credit students
are Pell-eligible).
5. Student fees are the lowest in the nation, and fee increases need not
necessarily reduce enrollments.
Revenues from student fees in the California Community Colleges are the
lowest in the nation. Fee levels were about one-third of the national average
before the Legislature’s recent fee rollback. Although comparable cross-state
data is not available, it is widely believed that the system’s total revenue per
student (state and local funds plus fees) is well below the national average, in
large part because of low fee revenue.
Fee increases in 2003–2004 and 2004–2005, from $11 to $26 per credit
overall, were accompanied by a headcount enrollment decline between
fall 2002 and fall 2005 of about 8% (2% in full-time equivalent students).
However, analyses by the Chancellor’s Office and the authors reveal that
the types of course offerings that were reduced due to budget cuts played
a significant role in these enrollment losses. Enrollment declines began in
spring 2003 after sections were reduced by 5% over the 2002–2003 academic
year and before fees were increased in fall 2003. Enrollment losses were largest
among older and part-time students, who are least likely to seek fee waivers
or other financial aid, and who are most likely to enroll in occupational
and nontransfer courses. Because these courses are more commonly taught
ix
California Community Colleges
by temporary faculty and are generally more costly to offer, they suffered
the largest cuts and still have not recovered fully. Enrollments fell the least
among younger and transfer students, in part because the offerings of transfer
and nonoccupational courses that they tend to take were reduced less and
restored more quickly. These students are also more likely to seek fee waivers
and other forms of financial aid. The enrollment of students aged 18 to 19
years increased modestly during the period of budget cuts and fee increases,
although probably less than would have occurred otherwise.
POLICY RECOMMENDATIONS
The California Community College system appears to be underfunded, and
its low performance with regard to student persistence and success evidently
suffers accordingly. A recent study by the Public Policy Institute of California
(PPIC) indicates that, taking students’ initial objectives as reflected in their
first-year course taking into account, rates of persistence to the second year,
degree and certificate completion, and transfer to four-year institutions
are quite low. Six years after initial enrollment in a California Community
College, only 26% of students from the 1997 entry cohort who took mostly
transfer courses in their first year had successfully transferred to a four-year
college or university, while another 6% had completed an associate’s degree
or certificate. Only 11% of those whose initial course taking was vocationally
oriented had completed a certificate or degree or transferred within six years
of entry.
These low rates of student success are likely linked to well-known
shortages of support services, as well as the existence of fiscal incentives
that value enrollment over persistence and the achievement of educational
goals. New fee policies and targeted resources are needed to preserve the
affordability of the community colleges, maximize the return on state and
student resources, and improve student success.
Recommendation #1
Increase annual fees modestly from the current $20 per credit, and match
the increase with additional state appropriations.
Current CCC fees and fee revenues are very low when compared with other
states. In addition, fee waivers for the financially needy ensure that they
do not pay fees. If fees were increased, most students who pay fees would
x
California Community Colleges
have access to additional federal aid and tax credits as a result. Matching
the additional fee revenue with increased state appropriations would help
offset the reluctance of college leaders and state policymakers to advocate for
necessary fee increases by creating greater impact in return for the difficult
step each must take.
All new revenue should be directed to the colleges as specified below.
Recommendation #2
Link the increases in fees and state appropriations to the annual growth of
state personal income per capita.
The annual growth in personal income per capita, which averaged 4.36% from
1996 to 2005 in California, is a good indicator of affordability for both feepaying students and the state. Annual increases of this magnitude over the
next decade would imply an increase in fees of $0.87 per credit in the first year
and $1.23 per credit in 2015–2016. For a full-time student taking 15 credits, this
would represent a total in increased fees of $26.10 for the 2007–2008 academic
year. Under these assumptions, the per-credit enrollment fee in 2015–2016
would be $29.37.
Recommendation #3
Direct the increased fee revenues toward improving student persistence,
completion, and transfer.
Funding programs targeted at these goals at increased levels should be clearly
linked to demonstrated improvements in their performance over a reasonable
period of time. Students paying increased fees should thus see benefits to the
quality of their education.
Recommendation #4
Direct new appropriations (state’s match) to enhancements in financial aid
outreach and capacity building and, to the extent these resources permit, to
a new California Community College grants program.
The infusion of funding for financial aid capacity building and outreach
through the Board Financial Assistance Program (BFAP) appears to be
showing results in terms of increased rates of participation in federal financial
aid programs. We recommend that the state continue to provide at least the
current level of funding (adjusted for inflation) for this effort. An increase
xi
California Community Colleges
in BFAP’s funding may well be justified, but this should follow a thorough
investigation of the more successful practices in use across the 109 colleges
and how to disseminate them. We found evidence of substantial variation
in recent Pell Grant participation gains across the system and promising
practices that appear to be replicable in use at a few of the more successful
campuses we visited. One practice that should be tried at least experimentally
is to link the fee waiver more firmly to the provision of information and
assistance for accessing federal and state aid programs, including assistance
with the Free Application for Federal Student Assistance (FAFSA). For
instance, students could be provided information and, if they chose not to
complete the FAFSA, asked to sign a statement indicating that they had been
fully informed about these opportunities before receiving a fee waiver. In
any case, an increase in BFAP funding should be tied to strong performance
accountability requirements that primarily emphasize gains in student receipt
of federal aid.
To the extent that there are funds remaining from the state’s match, a
new California Community College grants program should be designed to
help colleges meet the specific financial aid gaps and needs common among
their students. Unlike the University of California and the California State
University systems, the California Community Colleges have no aid resources
of their own (except for small private funds at some colleges). Support for the
BFAP administrative capacity building proposed above may first be necessary
if colleges are to create the capability to mount their own aid programs rather
than simply administering federal programs and Cal Grants.
Recommendation #5
Increase the state’s investment in Cal Grant awards.
In order to assist students in meeting the increasing costs of attendance
outside of fees, the state also needs to make direct investments in its own
student aid program, Cal Grants, through the following two means:
Increase the value of access grants to a level that provides more meaningful
assistance to needy students. The access grant maximum is currently about
30% of its original 1969–1970 value, and is no longer providing the level of
financial assistance originally intended by the Legislature. In addition to
regular increases linked to inflation, a substantial one-time increase in the
access grant level amount is needed. (Specific suggestions are provided in the
recommendations section of the report.)
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California Community Colleges
Increase Competitive awards available to students (in all segments) annually
to at least reflect growth in the number of eligible applicants for the awards. By
supporting such growth only, the state would continue to serve about
18% of eligible community college applicants for the Competitive awards.
Considering the costs of having an uneducated population and the tax-related
and other social benefits of having one that is more educated, however, it is in
the state’s interest to increase funding beyond this level and move toward, for
example, serving at least 25% of the eligible community college applicants.
CONCLUSION
In today’s global economic climate, the California Community Colleges are a
crucial resource for the state’s economic competitiveness and social progress.
As the primary access point to higher education for most low-income
students and students from California’s rapidly growing populations of color,
the community colleges must remain accessible and be provided with the
incentives and resources they need to ensure higher rates of student success.
This report examines how the colleges can achieve these goals without
placing the entire financial burden on state taxpayers.
xiii
California Community Colleges
Introduction
In California, with its long history of tuition-free (or more recently lowpriced) higher education, “affordability” has always been conceived largely
as keeping fees1 as low as possible. In the California Community Colleges
(CCC), a system explicitly designed to be accessible to almost everyone, state
residents did not pay fees at all until 1984, when an enrollment fee of $5 per
credit was imposed in response to a state budget crisis. By 2004–2005,2 this fee
had reached $26 per credit—still the lowest community college tuition rate in
the country—with all incremental increases to that point occurring grudgingly
during state fiscal crises (California Community Colleges Chancellor’s Office
2005a, 8). The low-fee regime has probably had some effect on access: There
is a modest inverse correlation between tuition/fees and participation rates
(enrollment divided by younger adult population) at the two-year college
level across the states, and California’s community college participation rate is
very close to the highest among them (Figure 1).3
Yet at this point in the history of the California Community Colleges,
it seems worth pausing to reexamine whether fees in the current range are
the key to affordability, and whether they are, on the whole, in the best
interest of these institutions and their students. If access to quality educational
opportunities for those who cannot afford to pay is the primary policy goal,
perhaps “fee policy” should be reframed as “quality and affordability policy”
so policymaking can take into account both quality issues and non-fee
dimensions of student affordability. Pertinent to quality is the fact that total
funding per student for California’s community colleges appears to be well
below national norms, which for the most part results from very low levels of
1
In California, the term “fees” is used in place of the term “tuition” used elsewhere.
At one time, this difference in terminology reflected the fact that fee revenue was not
used to cover direct instruction costs, but that is no longer strictly true.
2
The FY 2007 state budget act reduced the fee to $20 per credit effective in spring
term, 2007.
3
The bivariate correlation is –.42, which associates this relationship with about 18%
of the interstate variation in participation rates. Other variables would need to be
taken into account, however, before conclusions could be drawn about causation.
Wyoming, which has only one four-year institution, has the highest community
college participation rate among the states.
1
California Community Colleges
Figure 1
State Two-Year College participation Rates and Tuition, 2004-05
12,000
Fall Enrollment per 100K 18–44 year olds
10,000
WY
CA
NM AZ
8,000
WA
IA
KS IL
TX MS NE
NC
MI
HI
OK VA
FL
AR CO DE
6,000
4,000
MD
WI
KY
SC
NJ AL
OH
MO RI
ND
NY
UT
CT
MA
TN
IN PA
MT ME WV
GA
LA
ID
2,000
OR
MN
VT
NH
SD
NV
AK
0
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
Tuition and Fees
Note: Participation rates are determined using Fall 2004 enrollment and 2004 population estimates for ages 18-44.
Sources: Census Bureau, IPEDS, 2005 Digest of Education Statistics (Table 313)
fee revenue.4 Recent evidence also suggests that rates of student persistence
and progression in the CCC system and transfer to baccalaureate institutions
overall are distressingly low (Sengupta and Jepsen 2006, 14–19; Shulock and
Moore 2007).
It is important to recognize that, even for the average full-time California
community college student paying full fees, these fees represent only
about 5% of his or her estimated cost of attendance (California Student Aid
4
Reliable state comparisons of funding per full-time equivalent student (FTES) are
difficult to make, because the national source for higher education data, the U.S.
Department of Education’s Integrated Postsecondary Education Data System (IPEDS),
does not capture non-credit enrollment and suffers from wide variations across states
in how part-time and full-time students are counted. Consequently, enrollment and
revenue figures cannot be adequately matched for comparison purposes. It is widely
believed that, on a per-student basis, combined state and local funding in California
is close to the national average, but the amount of CCC revenue derived from fees
is the smallest in the United States, bringing the total funding per student to a
comparatively low level. A thorough study of the comparative status of CCC funding
relative to other states would be beneficial.
2
California Community Colleges
Commission 2005a).5 Estimated textbook costs are roughly equal to fees, and
few Californians would doubt the impact of housing, transportation, and
health care costs, along with recent inflation in these sectors, on students.
Moreover, thanks to the efforts of state policymakers and the community
colleges themselves, financially needy students need not pay fees—they can
access the state-funded Board of Governors’ (BOG) fee waiver by means of
a simple, brief, and readily available form. Depending upon specific family
circumstances, students with incomes well into the middle-class range can be
eligible.6 Recent outreach efforts have increased the number of BOG waiver
recipients substantially. They now represent about 29% of community college
students enrolled for credit. About 42% of all credits taken have the associated
fees waived. Fifty-two percent of full-time students in 2004–2005 had their
fees waived. Broader financial aid efforts are needed to help needy students
cope with their other, often daunting, non-fee costs of attendance, and indeed
such efforts are already helping in some measure, as will be shown.
We believe it is time for state policies regarding support for the California
Community Colleges and their students to take a broader view of the most
pressing issues. These colleges are absolutely crucial to the state’s economic
and social prospects at a time when higher education is key to economic
prosperity as well as to social equity and comity.7 The community colleges
enroll about two-thirds of the state’s undergraduate credit-seeking students—
the highest such proportion in the country—and they are the primary
5
For part-time students, the share of costs of attendance covered by fees is smaller
because the total amount of fees is lower. The percentage cited above applies to
students who are not living with their parents, which is the case for a substantial
majority of CCC students. For full-time students living with parents, financial aid
budgets put fees at about 7.5% of total expenses, primarily because imputed housing
costs for these students are lower.
6
Students demonstrating need on their Free Application for Federal Student Aid
(FAFSA) are eligible for a full BOG fee waiver. For example, a full-time married
student with one child and joint income of $83,000 would demonstrate $180 in need
($14,442 cost of attendance minus $14,262 expected family contribution) and be
eligible for a full fee waiver.
7
Recent reports indicate that the growing demand for a highly educated workforce in
conjunction with population shifts toward demographic groups with lower education
levels will lead to future declines in skills and incomes for Californians. To avoid
such a scenario, substantial improvement in educational attainment for particular
demographic groups, most notably Hispanic youth, is needed. See Campaign for
College Opportunity 2006; National Center for Public Policy and Higher Education
2005a and 2005b.
3
California Community Colleges
access point to higher education for the state’s burgeoning populations of
Hispanics and other persons of color, as well as for students from modest
circumstances generally. It is imperative that the community colleges perform
their increasingly critical economic and social roles effectively and that
students be able to access and progress successfully through the educational
opportunities they provide. In this report, we explore these important matters
and pertinent evidence with a primary focus on the initial charge provided to
us by the Hewlett Foundation: to study the many dimensions of community
college affordability in California, relevant trends in these, and related policy
implications.
4
California Community Colleges
Key Issues and Questions
What are the key non-fee dimensions of affordability, and how do they
affect students?
As discussed above, even at 2005–2006 levels, fees represented only about
5% or less of estimated cost of attendance for typical California community
college students, so it is important that we understand the non-fee dimensions
of students’ costs, trends in these, and how problematic they are relative
to students’ financial resources. The short answer is that non-fee costs of
attendance, such as textbooks and rental housing, are generally climbing
rapidly.
How do California community college students finance their attendance?
To understand affordability, we need to understand students’ finances.
Because community college students are quite disparate in age, family
circumstances, attendance patterns, and the like, this disparity implies
disaggregating the nearly 2.5 million CCC students in meaningful ways. We
used national survey data to compare the attendance financing patterns of
California community college students in 2003–2004 with those of two-year
college students in other states in the same year, and with their California
counterparts from four years earlier (1999–2000). Our findings reveal both
some positive trends in affordability and some serious remaining challenges.
Are the California Community Colleges and their students taking full
advantage of student financial aid programs, particularly federal aid?
Traditionally, because of their history of no or low fees, many of the California
Community Colleges have not strongly encouraged students to seek financial
aid, such as federal Pell Grants, subsidized student loans, and state Cal
Grants, which could help them defray non-fee costs of attendance. Beginning
in 2003–2004, mainly as a response to the fee increases of that year, the state
and the colleges have allocated substantially greater resources to this effort.
It is time to assess the results and identify lessons learned and continuing
challenges.
5
California Community Colleges
To what extent are fee levels related to the amount of federal student aid
that CCC students obtain? Is the state taking full advantage of the federal
resources available to help finance higher education in California?
Because of federal Pell Grant rules that work to discourage very low tuition,
the Legislature’s latest CCC fee reduction will likely result in some $20 million
annually in reduced Pell Grant support for some of the state’s lowest-income
students, according to Legislative Analyst estimates.8 California students
and families also forego substantial sums in federal tax credits, which could
be claimed if fees were higher, and then used to offset educational costs.
Policymakers should explore and consider the potential for such offsets
to mitigate the impact of possible fee increases on students and families,
particularly in the context of the colleges’ apparent need for increased
funding of financial aid and student support programs. At the same time,
policymakers must fully understand and consider the ways in which fee
revenue and Proposition 98 community college funding interact if increased
fee revenue is to have the desired effects.
To what extent were the fee increases of 2003 and 2004 responsible for
enrollment declines at around the same time?
In the last state fiscal crisis, the Legislature increased the community colleges’
basic enrollment fee from $11 per credit in academic year 2002–2003 to $18
in 2003–2004 and to $26 in 2004–2005, where it remained in 2005–2006.
Enrollments fell significantly during this three-year period, raising the
question of how tight the causal connection is between fee levels and
enrollments. The answer is not obvious, as other factors affecting enrollments
were also at work, notably reduced course offerings and fee waivers for many
students. It is important to understand these linkages as well as possible
since manipulating fees (in both directions) seems to have become a standard
policy response to state fiscal circumstances.
To what extent have the significant changes in the Cal Grant programs that
took effect during 2001–2002 affected CCC student participation in this
program?
The Legislature made various changes in the Cal Grant student aid programs, in
part to provide community college students with more access to grants. After five
years, it is time to assess the impact of these changes, identify barriers continuing
to affect community college attendance, and explore potential remedies.
8
Federal rules may be changed in time to avoid this outcome, but such a result is by
no means assured.
6
California Community Colleges
Non-Fee Dimensions of Affordability
Even at peak 2005–2006 levels, fees represented only a small fraction of
students’ cost of attendance (if they were paid at all). Therefore, it is important
to inquire into other dimensions of the affordability equation facing California
community college students, because these may be pivotal in determining
initial enrollment or persistence. To do this, we studied recent trends in
the student budgets developed by the California Student Aid Commission
(CSAC) and used by student aid offices in the CCC system. We also reviewed
trends in the Consumer Price Index (CPI) of the U.S. Bureau of Labor Statistics
(BLS) and the California version of this index (CCPI) developed by the state
Department of Finance,9 with a particular focus on the components likely to
be most pertinent to community college students.
Every three years, CSAC conducts a survey of thousands of students in
each of California’s higher education segments to ascertain the costs they face
as accurately as possible. This is called the Student Expense and Resources
Survey, or SEARS, and serves as an important input in setting standard
student budgets for the purpose of determining need for financial aid. In the
years between surveys, CPI or CCPI data is used. SEARS were conducted in
2000–2001 and 2003–2004. In the latter survey, 6,377 CCC students responded,
for a sample response rate of 50.8%.
Finally, because textbook costs have been a particular concern in recent
years, we investigated those, along with efforts to address them, more closely.
Housing Costs
It will not surprise many Californians to learn that the overall California
Consumer Price Index (CCPI) has outpaced the U.S. CPI by more than 16%
over the most recent five-year period (2000–2005),10 gaining 15.8% compared
9
The Bureau of Labor Statistics’ Consumer Price Index (CPI) measures changes in
prices for urban consumers of a defined set of goods over time. The BLS reports CPI
data for the United States and its major metropolitan regions. The state Department
of Finance calculates the California CPI using the Los Angeles and San Francisco
BLS metropolitan indices, weighted for population (68% and 32%, respectively).
Projections of future price growth, used in financial aid budgeting, are made using
Department of Finance statistical models and U.S. CPI growth projections.
10
All CPI and CCPI calculations use July to June figures to match California’s fiscal
year and to reasonably approximate the academic calendar.
7
California Community Colleges
with 13.6% nationally. Certain cost components that are particularly heavily
weighted in students’ budgets have grown even more rapidly. Housing costs,
for example, comprised 38% of the average total expenses of full-time CCC
students who were independent of their parents for financial aid purposes,11
according to the 2004 SEARS. This share is substantially larger than that of
the general population, only one-third of whom spend more than 35% of
their household income on housing (U.S. Census Bureau 2005). While many
students deemed dependent for financial aid purposes by federal regulations
live with parents, nearly half (49%) live separately and so incur direct housing
costs, as do nearly all independent students.
According to the SEARS data, the average spending for housing during
the nine-month academic year for those reporting off-campus housing
costs was $5,892 in 2004, or about $655 per month. The CCPI’s rental cost
component jumped by 24.5% in California over the 2000–2005 period. The
CSAC budget component for off-campus housing costs was increased by 21%
over these years. Thus, this large component of many CCC students’ budgets
grew at rates well above general inflation.
Transportation
Transportation is another important item in student budgets, weighted at
10.8% for full-time dependent students and 7.8% for full-time independent
students. From 2000 to 2005, CSAC increased the budget allowance for
transportation by about 22% both for students living with parents and for
students living on their own, which is higher than the CCPI growth rate
for transportation (13.4%). Transportation is a particularly volatile index
component due to the inclusion of gasoline prices, which increased 57.2% in
California over the same five years. Sudden and unexpected increases in these
costs, such as have occurred recently, may leave students with expenses that
surpass the budget projections on which their financial aid awards are based.
Textbooks and Supplies
It is notable that for a typical CCC student, textbook costs alone are roughly
equal to fees, which are estimated at about $774 for 2006–2007 for a full-time
student (California Student Aid Commission 2005a).12 In estimating textbook
costs for student aid purposes, CSAC has included them in a broader category
11
The housing cost percentage was even higher for independent part-time students.
After fees are reduced from $26 to $20 per credit, estimated textbook expenses will
be higher than fees.
12
8
California Community Colleges
called “books and supplies.” The most closely corresponding category in the
U.S. CPI, “Educational Books and Supplies,” increased by 31.3% from 2000 to
2005, which is more than twice the overall consumer inflation rate. Evidently
because of SEARS responses, the CSAC budget allowance for books and
supplies has grown by only 11.1% over the same five-year period.13 Appendix
A presents a further discussion of textbook costs and describes efforts
underway or that could be initiated to help students cope with them.
Food Costs
Food costs are estimated to average almost 22% of full-time independent
students’ budgets, according to SEARS 2004. CSAC has allowed a five-year
increase of 11.4% in this budget component for students living on their own.14
The CCPI shows a larger increase of about 14.2% in typical food costs over
this period.
Other Expenses: Health and Child Care
One significant cost-of-living component—at least for many—that appears
to receive too little attention in CSAC/CCC financial aid need analysis
methodology is medical expenses. On the 2004 SEARS, about half of
community college students reported medical expenses (excluding insurance
premiums15), and these averaged $483 for the academic year, or about $54
per month. The CCPI for this category increased by 25.3% from 2000 to 2005.
Yet CSAC’s budgeting methodology does not represent growth in medical
care costs well, instead putting these costs in a much broader “personal
13
Since 2002–2003, CSAC has included books and supplies in a broader category that
also includes course material fees and computer-related expenses (but not computer
purchases). This broader CSAC category corresponds more closely to the relevant
CCPI category, called “education and communication” costs, which increased by
16.5% over the same five-year period. Educational books and supplies are weighted at
only 3.2% within the “education and communication” CPI category (across the entire
population), but comprise 72.6% of the “books and supplies” student budget category,
so there are serious concerns about how well the use of the larger CPI category
adequately represents changes in students’ costs.
14
It is, of course, much more difficult to estimate such costs for students living with
parents.
15
This exclusion is significant for some. According to the California Health Care
Foundation (2005), workers with health coverage paid an average of $492 per year for
single coverage and $2,883 for family coverage. On average, premiums increased by
73% from 2000 to 2005.
9
California Community Colleges
and miscellaneous” expenses category.16 It is noteworthy that, of the eight
major expenditure categories in CPI and CCPI calculations, medical care
has experienced the largest five-year growth and is the only one not directly
captured in financial aid budgeting methodology.
Child-care expenses can also be very significant for some students.
According to data collected in 2003–2004 from a large sample of California
community college students by the National Postsecondary Student Aid
Study, about 33% have dependents (U.S. Department of Education 2006b).
While all students’ dependents may not be children, it is reasonable to assume
Figure 2
Five Year Increases in Selected Price Indices,
Indexed to 2000-01 = 100
CCPI
CPI, Childcare
CSAC, Off Campus
CCPI, Medical Care
CPI, Ed. Books and Supplies
US CPI
135
Index Score
125
115
105
95
2000–01
2001–02
2002–03
2003–04
2004–05
2005–06
Sources: Bureau of Labor Statistics, California Department of Finance, CSAC Nine-Month Student Expense Budgets.
16
This broad category includes the much slower-growing indices for costs of
recreation, apparel, and other goods and services. The CCPI for the “personal and
miscellaneous” category thus increased by just 6.2% over the 2000–2005 period.
While the CSAC financial aid budgets show significant growth in this category, the
growth occurred largely through one-time adjustments in years with new SEARS data
rather than through reasonably smooth annual adjustments that would better track
students’ true costs.
10
California Community Colleges
that the large majority are. Child-care expenses are not part of standard CSAC
budgets, although financial aid applicants who have children can have a
special budget customized to reflect documented “reasonable expenses.”17 For
those students reporting child-care expenses on the 2004 SEARS, these were
quite significant, averaging $2,867, or about 20% over and above all other
expenses for a full-time independent student. The California CPI does not
include this category, but according to the U.S. CPI, child-care costs climbed
25.5% over the 2000–2005 period.
To sum up, life is expensive in California, and for community college
students, it is particularly so. As shown in Figure 2, many of the components
that weigh heavily in students’ budgets, such as books and supplies,
rental housing, and—for some—health and child-care expenses, have been
increasing much more rapidly than the overall price indices (CPI and CCPI)
that are designed for the general population. When viewed in this context, it
becomes apparent that community college fees are only a small factor in the
overall student affordability equation in California, even though they get the
vast majority of policy attention.
17
This process alone may present impediments to students who are parents.
11
California Community Colleges
How California Community College Students Finance
Their Attendance*
Using data from the National Postsecondary Student Aid Study (NPSAS)
covering a sample of 2,858 California community college students from 26
colleges, and 26,000 two-year college students nationwide,18 we examined
how CCC students finance their studies compared with community college
students elsewhere. The latest survey (NPSAS 04) was done in 2003–2004
(U.S. Department of Education 2006b), the second year of depressed budgets
for the CCC system, the year in which fees were $18 per credit (up from $11
the previous year), and also the year when the Legislature first provided
a large infusion of funds for increasing the capacity of colleges’ financial
aid operations.19 NPSAS 04 sample sizes were sufficient for comparisons of
California students with community college students in other large states:
Illinois, New York, and Texas. We also compared many key data elements
from the NPSAS 04 data for California with those from NPSAS 00, conducted
during the 1999–2000 academic year under quite different circumstances.
*We are grateful to Lutz Berkner and colleagues at MPR Associates Inc. for their
expert assistance and guidance in these analyses. Responsibility for matters of
interpretation, however, rests with the authors.
18
The NPSAS data is drawn from a nationally representative sample of students
enrolled in postsecondary education in the survey year. Colleges are randomly
selected for inclusion within strata based on institutional types (public two-year,
public four-year, etc.), and students are randomly selected for participation from
college-supplied enrollment lists. Based on their characteristics, respondents are
statistically weighted to reflect the national student population within the strata.
For California and several other states, sample sizes and sampling strategies were
designed for state-level representativeness. Data in NPSAS comes from student
self-reporting (work), institutional reporting (tuition, enrollment, financial aid), and
federal data sources, such as FAFSA applications and records for Pell Grants and
student loans.
19
Funding was augmented by the Board Financial Assistance Program-Student
Financial Aid Administration (BFAP-SFAA), which provided a total of $46 million for
financial aid staffing, capacity building, and a media outreach program to students.
This total represented an increase of $38 million for a much smaller program begun a
few years earlier (Bonnel 2003) and a large expansion of total funds available for these
purposes.
12
California Community Colleges
Characteristics of California Community College Students
Table 1, compiled by MPR Associates, compares the California
NPSAS 04 respondents to the CCC Chancellor’s Office (CO)
official data on students enrolled for credit in fall 2003.
Overall, the correspondence is quite close. Percentages of
full-time and part-time students are virtually identical,20 and
the shares of the different ethnic groups in the student body
are very close. The only notable difference between the two
data sources is that a somewhat larger share of the NPSAS
respondents were in the 40-plus age range (22% in NPSAS
versus 18% in the CO data), while a correspondingly lower
share were in the 20–24 age range (27% in NPSAS compared
with 31% in the CO data). Because our analyses are based
primarily on disaggregated categories of students, this small
difference has little implication for the generalizability of our
findings. By any measure, the CCC student body enrolled for
credit is highly diverse ethnically, is about 50% composed of
students older than 24—which is the standard age threshold
for defining a “nontraditional” student—and contains a large
majority, about 70%, of part-time students.
Table 1
CCC Chancellor’s Office/NPSAS
Demographic Comparison
CCCCO
%
7
28
16
40
8
CCC NPSAS
Respondents
(weighted)
%
7
28
16
38
11
Age Group
<20
20–24
25–29
30–39
40+
23
31
13
15
18
23
27
12
15
22
Attendance Pattern
Full-time
Part-time
30
70
29
71
Ethnicity
African American
Hispanic/Latino
Asian
White
Other
Source: Chancellor's Office Data Mart, NPSAS 2004.
Having established the close match between the NPSAS and the official
enrollment data for the CCC system, we then examined some of the major
demographic characteristics of the NPSAS California students and how they
compared with community college students in other states as background
for our comparisons of their attendance financing patterns. At 59.7%, the
California system’s proportion of students of color was 25 percentage points
higher than the NPSAS figure for community college students from all other
states combined, and well above the next highest of our three comparison
states (Texas at 51.7%). The age distribution of CCC students was quite similar
to that of the other states, but California had slightly fewer students in the
20–24 age range and slightly more over 40.
Significantly, at 29.4%, the CCC share of full-time students was
substantially below the national community college figure of 41.6% full time,
and well below any of the comparison states. (Texas was the next lowest at
36.2% full time.) Also of note, as Table 2 makes clear, is that the California
20
The NPSAS sample, however, has slightly fewer less-than-half-time students than
the Chancellor’s Office reports.
13
California Community Colleges
Table 2
Community College Student Income Distribution by State
Dependent
Students
US - CA
California
Illinois
Texas
New York
Independent
Students
US - CA
California
Illinois
Texas
New York
10th
Percentile
25th
Percentile
50th
Percentile
75th
Percentile
$
15,554
9,084
19,065
15,432
13,535
$
30,362
23,896
35,444
26,561
27,326
$
53,120
49,805
57,167
51,902
46,551
$
82,968
81,403
80,076
80,082
76,736
$
121,400
123,589
103,203
116,064
126,796
4,358
2,990
5,163
3,632
3,419
12,576
11,516
14,582
11,538
10,877
27,291
29,013
31,914
25,603
24,294
50,927
57,048
56,697
47,871
46,272
78,135
87,968
86,740
75,378
68,780
Source: NPSAS:04
90th
Percentile
Community College system serves
many students from very modest
financial circumstances. Although
the California students’ median
income––for both dependent and
independent categories––is fairly
similar to the national figures
(without any adjustment for
California’s high cost of living),
California students at the low end
of the income distribution (10th and
25th percentiles) are well below the
national norms in income, and rank
at or very near the bottom among
the comparison states.
Categories of CCC Students
Our primary purpose here is to better understand the education financing
patterns of the diverse types of California community college students. After
considerable investigation, we found that the most critical variables for this
purpose were age, the student’s dependence status for financial aid purposes
(which for most students is linked to age21), and whether the student is
enrolled full time22 or part time.23 Because we were also influenced by sample
size limitations, we ultimately disaggregated the NPSAS CCC respondents
into five categories as follows:
• Full-time dependent students (n=569); N(weighted)=160,000
• Part-time dependent students (n=701); N=338,000
21
Students under 24 years of age are generally considered dependent unless both
parents are deceased, they are married, have dependents of their own, or have
veteran status.
22
For students enrolled in one college, institutional reports were used to gauge
enrollment intensity. Student reports on the NPSAS were used for those enrolled at
two or more colleges. For our purposes, full-time students included those enrolled for
a full course load in at least one college for nine or more months of the academic year,
as reported by the school(s).
23
Part-time students may be enrolled at one or more institutions for any number of
months in the academic year, and have been classified by themselves or their college
as enrolled part time, half time, or less than half time.
14
California Community Colleges
• Full-time independent students (n=307); N=71,000
• Part-time independent students, age <30 (n=528); N=249,000
• Part-time independent students, age 30 or older (n=753); N=386,000
The analyses reported in the remainder of this section utilize these
categories. The percentages are based on the weighted numbers.
The major demographic differences among these categories within the
CCC system are as follows.
Gender: Overall, 60% of CCC students were women. This proportion
ranged from a bit more than half for the two dependent student categories
up to 68% for independent part-time students over 30. About 66% of the
independent full-time students were female.
Ethnicity: Table 3 shows the distribution of the NPSAS CCC students
by ethnicity. In general, the ethnic differences across the different student
categories are relatively modest, or, to put it slightly differently, all ethnic
groups are substantially represented in all the student categories. Whites are
overrepresented in the category of independent part-time over-30 students,
which in part reflects the larger share of whites in the older population of
California. Blacks are overrepresented among independent full-time students,
but underrepresented in the two groups of dependent students. Relative to
their share of all CCC students, Hispanics are overrepresented in these latter
Table 3
two categories (in part a reflection
CCC Student Ethnicity by Student Category
of this group’s rapid population
White
Black
Hispanic
Asian
growth) and even more so among
Dependent, Full-time
39.6%
4.9%
31.4%
16.7%
independent part-time students
Dependent, Part-time
35.5%
6.4%
31.4%
15.5%
Independent, Full-time
37.5%
12.9%
27.8%
14.1%
under 30. Asians are relatively
Independent, Part-time, <30
36.4%
8.2%
35.9%
13.3%
equally represented in each student
Independent, Part-time, 30+
47.0%
9.8%
24.1%
12.5%
41.3%
8.0%
28.5%
14.5%
category with some small bias toward All Categories
Source: NPSAS:04
the younger (dependent) categories.
Marital status and dependents Overall, 33% of CCC students reported
that they had dependents, and nearly half of these students were unmarried.
While, as would be expected, the students over 30 were more likely to have
dependents, the majority of them were married. In contrast, a large majority
of the independent full-time students with dependents and independent
part-time students under 30 with dependents were single. Among our five
student categories, the highest incidence of singles with dependents was in the
15
Other
7.5%
11.2%
7.8%
6.2%
6.6%
7.8%
California Community Colleges
independent full-time group at just over 31%.
Income: Table 4 shows how income varies among our five categories
of students, based on the data respondents provided to NPSAS about their
family income.24 There is relatively little difference in the family income
distributions of the two categories of dependent students. But these students
are notably better off than all three categories of independent students.
The lowest-income group was the independent full-time students, with a
median income of $16,223—one-fourth of these students had incomes of
less than $5,544 per year.
Table 4
CCC Student Income Distribution by Student Category, 2003-04
The independent part-time
10th
25th
50th
75th
90th
students under age 30 were
Percentile
Percentile
Percentile
Percentile
Percentile
not much better off. In
$
$
$
$
$
Dependent, Full-time
10,777
24,290
50,653
81,403
115,113
contrast, the median income
Dependent, Part-time
8,715
23,377
48,533
78,076
126,621
for independent part-time
Independent, Full-time
332
5,544
16,223
39,440
58,609
Independent, Part-time, <30
2,021
8,593
20,700
42,577
65,271
students over 30 was above
Independent, Part-time, 30+
5,773
17,947
40,056
68,392
95,061
$40,000, and 25% of them
All Dependent Students
9,084
23,896
49,805
81,403
123,589
All Independent Students
2,990
11,516
29,013
57,048
87,968
had incomes of more than
Source: NPSAS:04
$68,392.
English language learners: Overall, about 26% of the CCC NPSAS 04
respondents indicated that English was not their primary language. There
was relatively little variation in this across the five student categories.
Educational objective: Table 5 shows the educational objective indicated
on the NPSAS by the different categories of CCC students. Transfer to
a four-year institution was the stated objective of the largest number of
respondents (42%) overall,25 and this percentage exceeded 50% for both
categories of dependent students. The portion planning to transfer was
45% among the independent full-time students, but substantially lower in
the two categories of independent part-time students (particularly so in
the over 30 group). These latter two groups had the highest percentages, at
just under 30%, seeking an associate’s degree (but not to transfer), and the
24
Income data was derived from the student’s federal aid application (FAFSA) when
available; otherwise the data was drawn from student estimates provided on the
NPSAS survey.
25
We coded respondents’ objective as transfer even if they also indicated one of the
other responses. Similarly, if a student indicated their objective was an associate’s
degree, this was assumed to dominate the responses farther to the right in Table 5.
The same applies to the job preparation response.
16
California Community Colleges
largest percentages indicating
that their objective was job
preparation (particularly in the
over 30 group). The percentage
indicating that their objective
was “personal interest” was
substantial at 17% overall, but
did not vary much across the
student categories.
Table 5
CCC Student Educational Objective by Student Category
Transfer to
4–year*
Dependent, Full-time
54.8%
Dependent, Part-time
51.2%
Independent, Full-time
45.0%
Independent, Part-time, <30
38.6%
Independent, Part-time, 30+
25.5%
All Categories
42.2%
Associate
Degree*
18.1%
18.4%
20.8%
29.6%
29.8%
Job
Preparation*
5.5%
6.6%
13.4%
13.5%
22.7%
Personal
Interest
16.5%
16.7%
16.9%
15.0%
19.0%
Other/No
Objective
5.1%
7.1%
3.9%
3.4%
3.1%
23.7%
12.6%
17.0%
4.5%
* When multiple objectives were given, objectives to the left of the table were prioritized over all others. For example,
a student listing objectives of transfer and job preparation would be included above as transfer only. Because of this,
the above percentages are unweighted.
Source: NPSAS:04
Financing Patterns
Table 6 compares California’s community college students26 with those in the
rest of the United States and the three large states of Illinois, New York, and
Texas in terms of tuition/fees paid, total cost of attendance, and application
for and receipt of financial aid. What is immediately apparent is that while
CCC students benefit from much lower tuition than is the norm elsewhere,
their overall estimated average cost of attendance (based on student budget
data reported by the institutions) is not far below costs in the comparison
states (except in New York, where
Table 6
the much higher tuition accounts
Community College Student Costs and Rates of Aid Application and Receipt
for the difference).27 This means,
Tuition/
Total Cost of
Applied for
Received
Received
Fees
Attendance
Federal Aid
Grants
Loans
of course, that California students
US - CA
$1,195
$6,308
48.7%
44.5%
16.8%
generally face higher non-tuition
California
$291
$5,490
35.9%
26.4%
5.8%
Texas
$763
$5,527
47.2%
39.6%
12.8%
costs, which can be addressed only
Illinois
$1,021
$5,882
36.4%
35.4%
8.6%
$2,074
$7,456
61.5%
54.0%
22.4%
by financial aid over and above any New York
Source: NPSAS:04
fee waiver a needy student may
obtain. Yet the table shows that
26
To focus more directly on those student groups of greatest policy interest, we
deleted 119 students from the data file who met three criteria: 1) were enrolled less
than half time, 2) were enrolled for less than a full academic year, and 3) indicated an
educational objective that was not transfer, degree, job, or certificate. To better focus
the financing data on full-time students, which is reported on an annual basis, we also
deleted 202 students who were full time but enrolled for only part of the year. These
deletions left us with 2,537 CCC respondents for the analyses of financing patterns.
27
Cost of attendance (COA) for California students is higher than the national figure
in two of the five student categories, but the overall COA figure for California is
decreased by the state’s larger share of part-time students.
17
California Community Colleges
California students’ application rates for financial aid are comparatively low.28
In particular, the percentage of California students who applied for federal
aid was nearly 13 percentage points below the figure for all other states, and the
share that actually obtained loans was very low. Importantly, the California
figures on these two measures were below those for the rest of the United
States for all five categories of students.
Table 7 shows the comparisons specifically for receipt of federal Pell
Grants and state grants.29 Again the percentage of students in California
receiving Pell Grants is well below the national norm, and also well below
the other comparison states (except Illinois, where the difference is small),
and this applies across all the student categories. With regard to state
grants—Cal Grants in this context—California students’ participation is
about 11 percentage points below the national norm and below that of all
the comparison states across all student categories. In terms of “institutional
grants or waivers” (largely BOG waivers in the California case), California is
above the national and other states’ norms,
Table 7
and we know the California figure is a
Community College Student Grant Receipt
substantial underestimate.30 The typical
Received
Average
Received
Average
Pell Grant
Pell Grant
State Grant
State Grant
amount of money involved for recipients,
US - CA
25.4%
$2,295
13.6%
$1,017
however, is far below the national norm
California
15.5%
$2,538
2.7%
$1,262
Texas
26.4%
$2,449
5.9%
$941
(because fees are very low), and we
Illinois
17.1%
$2,213
11.6%
$961
New York
34.2%
$2,409
32.2%
$1,442
again note that these waivers do not
Source: NPSAS:04
help students with their non-fee costs of
attendance.31
Table 8 shows, for each category of students, estimated student budgets,
the percentage of students with financial need after their expected family
contribution (EFC) is considered, and the percentage with need and the
28
CCC institutional reports of application and receipt rates for grants and total aid are
affected by substantial underreporting of BOG fee waivers. In 2003–2004, the NPSAS
data showed just 13% of students reporting fee waivers, while the Chancellor’s Office
reported 26% receiving waivers. Consequently, we depend here mostly on data about
other types of aid, i.e., federal grants and loans and state grants, such as Cal Grants.
29
It should be noted that in NPSAS, BOG fee waivers are treated as “institutional
grants” even though the fee revenue lost by such waivers is replaced by the state.
30
See previous note.
31
The average institutional grant/waiver reported by the Chancellor’s Office is
about $260; we assume that the NPSAS amount is higher because of bias due to
underreporting.
18
California Community Colleges
average amount of need after
all grants and all other aid
are taken into account. The
California students in general
have similar percentages with
need and similar levels of need
as students in the other states,
but the right columns show that,
after their lower receipt of grants
and loans is taken into account,
CCC students generally end
up with unmet need and with
higher levels of such need than
students in other states.
Table 8
Community College Student Costs and Financial Need by State and Student Category
Budget
$
Dependent, Full-time
US - CA
9,884
California
9,224
Texas
8,309
Illinois
9,481
New York
9,875
Dependent, Part-time
US - CA
4,879
California
4,398
Texas
4,077
Illinois
4,403
New York
5,587
Independent, Full-time
US - CA
11,198
California
11,469
Texas
10,548
Illinois
11,190
New York
12,390
Independent, Part-time, <30
US - CA
5,176
California
5,036
Texas
4,946
Illinois
4,528
New York
5,306
Independent, Part-time, 30+
US - CA
5,095
California
5,269
Texas
4,994
Illinois
4,514
New York
5,938
Financial Need
After EFC
%
$
Need After Grants
%
$
64.8%
60.9%
62.9%
58.6%
68.8%
6,547
6,600
5,895
5,647
7,150
62.6%
60.3%
61.7%
57.8%
67.3%
4,717
5,345
3,795
4,449
4,517
54.8%
57.8%
56.6%
54.8%
58.4%
4,389
5,097
3,591
4,482
4,355
41.5%
44.0%
38.5%
33.1%
53.5%
3,818
3,802
3,246
2,942
3,764
37.9%
41.7%
34.3%
31.7%
46.4%
2,881
2,920
2,372
2,080
2,535
32.3%
38.2%
32.4%
28.3%
38.5%
2,740
2,942
2,199
1,942
2,526
91.4%
96.1%
96.2%
87.5%
95.9%
9,681
9,355
9,425
9,912
10,403
90.9%
94.5%
96.2%
87.5%
95.7%
6,986
7,493
6,315
7,435
6,987
76.5%
86.2%
78.5%
80.8%
82.7%
5,854
6,739
5,374
6,968
5,781
54.5%
60.4%
54.5%
49.9%
55.4%
3,122
3,553
3,191
3,269
3,202
46.9%
48.5%
49.0%
43.1%
48.6%
3,035
3,673
3,195
3,153
3,276
The two categories of fulltime students face the worst
66.6%
4,367
64.6%
3,426
circumstances. Fully 86% of the
64.0%
4,401
63.5%
3,693
64.0%
4,234
62.1%
3,313
independent full-time students
57.6%
3,951
54.9%
3,302
in the CCC system face unmet
63.6%
5,052
63.5%
3,441
need after all aid is considered,
56.6%
4,237
54.7%
3,337
compared with 76% nationally,
52.0%
4,512
51.2%
3,822
57.2%
4,078
55.7%
3,331
and their unmet need averages
49.0%
3,935
47.7%
3,276
60.6%
4,629
60.0%
3,541
$6,739, or $885 more than the
Source: NPSAS:04
national norm for this category.
For dependent full-time
students, the picture is somewhat less daunting, but 58% of them face unmet
need, compared with 55% nationally, and this need averages $5,097, or $708
more than the national norm. These comparisons provide some clues as to
why California Community Colleges have such a low percentage of full-time
students in spite of their low fee structure. Such high levels of unmet financial
need probably also play a role in the system’s low student persistence, degree
completion, and transfer rates.32
Student Work
Given that financial aid is inadequate to meet the needs of many, how then do
California community college students pay their bills? The primary answer
32
For new studies of these rates carefully disaggregated according to early indicators
of student intent, see Sengupta and Jepsen (2006); and Shulock and Moore (2007).
19
Need After All Aid
%
$
California Community Colleges
is that, like community college students elsewhere, they work long hours.
Overall, 81.5% of CCC students indicated to NPSAS that they worked, and
their work hours averaged 32 per
Table 9
CCC Students Who Work by Student Category
week. Table 9 (top panel) shows that
Average
even full-time students worked a
Worked
Received Weekly Work
good deal. Among dependent fullWorked*
Full-time* Work-Study
Hours
2004
time students, nearly 80% worked
Dependent, Full-time
79.6%
13.2%
8.0%
23
an average of 23 hours per week,
Dependent, Part-time
80.6%
33.2%
3.4%
30
Independent, Full-time
79.9%
35.6%
17.3%
29
and 13% worked 35 or more hours,
Independent, Part-time, <30 84.2%
50.0%
3.9%
33
or essentially full time. The same
Independent, Part-time, 30+ 81.4%
56.9%
2.0%
36
All Categories
81.5%
43.0%
4.3%
32
percentage of independent full-time
2000
students worked, but they averaged
Dependent, Full-time
86.2%
20.5%
3.6%
27
29 hours per week, and more than
Dependent, Part-time
84.9%
39.3%
0.6%
32
Independent, Full-time
64.7%
28.3%
5.3%
31
35% worked full time. It is clearly
Independent, Part-time, <30 88.6%
65.9%
0.8%
39
Independent, Part-time, 30+ 83.2%
63.1%
0.0%
39
very difficult to work this much and
All Categories
82.9%
49.4%
1.1%
35
progress satisfactorily as a full-time
* Includes work-study.
student.
Source: NPSAS:04
Understandably, part-time students worked even more—more than 80%
in each part-time category, and all averaged 30 or more hours per week.
Research shows quite clearly that, for college students generally, working
more than 15 to 20 hours per week tends to be detrimental to grade average,
credits taken, persistence, and time to completion (King 2002; Pascarella and
Terenzini 2005). These effects likely apply particularly to many community
college students, whose educational backgrounds often necessitate their
applying more time to studies to be successful. Add to this the time demands
of parenthood and/or marriage that many students experience, and it
seems clear that a great many CCC students are working too much for their
educational well-being.
Changes Between 2000 and 2004
Fortunately, comparisons of the NPSAS 04 data with that collected from CCC
respondents in the NPSAS 00 survey (1999–2000) suggest some favorable
trends. The percentage of all CCC students who applied for federal aid, while
still below national norms, increased substantially, from 21% in 2000 to 36%
in 2004 (Table 10), and there were strong gains in this measure across all
categories of students. Similarly, the percentages receiving a Pell Grant grew
from around 10.6% to 15.5%, but this increase was concentrated in the part-
20
California Community Colleges
time student categories. There were no
appreciable gains in Pell receipt among
full-time students, whether dependent
or independent. Loan participation
rates increased somewhat, from 3.4%
of the student population to 5.8%,
and there were increases in all student
categories except dependent parttimers. These rates remain very low,
however, compared with community
college students elsewhere. Rates of
receipt of state grants also increased,
but only from 1.7% of CCC students
to 2.7%, which is still quite low by
national norms.
Table 10
Percentage of CCC Students Receiving Major Types of Aid by Student
Category, 2000 and 2004
2004
Dependent, Full-time
Dependent, Part-time
Independent, Full-time
Independent, Part-time, <30
Independent, Part-time, 30+
All Categories
2000
Dependent, Full-time
Dependent, Part-time
Independent, Full-time
Independent, Part-time, <30
Independent, Part-time, 30+
All Categories
Applied for
Federal Aid
Received
Pell Grant
Received
State Grant
Received
Loans
50.6%
41.8%
69.1%
41.8%
23.9%
19.9%
15.8%
38.4%
20.1%
11.8%
5.3%
4.0%
7.9%
1.4%
1.1%
9.8%
3.2%
22.4%
6.6%
4.8%
35.9%
15.5%
2.7%
5.8%
36.1%
23.7%
52.0%
21.0%
10.3%
19.2%
8.3%
39.4%
9.0%
5.9%
5.4%
1.4%
7.5%
0.7%
0.2%
5.1%
3.2%
17.3%
1.6%
1.9%
21.1%
10.6%
1.7%
3.4%
Source: NPSAS:04
The percentage of California community college students with financial
need (after EFC) increased sharply between 2000 and 2004, from 37% to
53% (Table 11). This increase very likely reflects the escalation in living
costs documented earlier.33 Similarly, the percentages with unmet need after
considering all grants and all aid jumped sharply. In short, students’ efforts
to obtain aid evidently were stronger in 2004 than four years earlier, and
there were clearly some improvements in aid received. Yet attendance costs
keep rising, and there is still a long way to go before CCC students’ financial
needs are met. This “aid gap” relative to need surely affects work hours and
persistence and completion rates. The perceived inadequacy or unavailability
of aid also undoubtedly affects the willingness of needy students to enroll in
the first place.
The data on work among California community college students in 2004
compared with 2000 shows some hopeful signs. The percentage of students
reporting that they worked fell a little, from 82.9% in 2000 to 81.5% in 2004
(see Table 9). This proportion fell in four of the five student categories, but
jumped 15 percentage points among independent full-time students, the most
needy group. Overall, the average time worked decreased by almost three
hours per week, and the percentage of students working 35 or more hours per
33
Need is based on student budgets reported by colleges and the expected family
contribution (EFC) calculated in the FAFSA. For students who did not apply for aid,
the EFC is estimated from income.
21
California Community Colleges
week also fell (by six percentage points). Workstudy participation increased and exceeded
national norms in 2004.34 These small gains in
reducing student work hours may be related
to the modest improvements in financial aid
participation,35 but it is clear there is much more
work to do on both fronts.
Table 11
CCC Student Need by Student Category and Year
Need After
EFC
Need After
Grants
Need After
All Aid
60.9%
44.0%
96.1%
64.0%
52.0%
60.3%
41.7%
94.5%
63.5%
51.2%
57.8%
38.2%
86.2%
60.4%
48.5%
53.3%
52.2%
49.2%
57.5%
33.0%
83.4%
40.9%
27.7%
56.4%
31.2%
83.4%
40.5%
27.2%
55.3%
30.5%
73.6%
39.5%
26.0%
37.4%
36.6%
35.1%
2004
Dependent, Full-time
Dependent, Part-time
Independent, Full-time
Independent, Part-time, <30
Independent, Part-time, 30+
All Categories
2000
Dependent, Full-time
Dependent, Part-time
Independent, Full-time
Independent, Part-time, <30
Independent, Part-time, 30+
All Categories
Source: NPSAS:04
34
The work-study program provides qualifying students with paid work
opportunities on campus, which may facilitate their studies compared with offcampus work.
35
Another, less positive, possibility is that the reduced work hours simply reflect the
relatively poor labor market conditions in 2004.
22
California Community Colleges
Are the California Community Colleges Taking Full
Advantage of Available Financial Aid to Make Attendance
More Affordable? What Role Does Fee Policy Play?
The Role of Financial Aid Outreach and Administrative Support
Based on the national comparisons just provided, we conclude that the
answer to the first of the above questions is no. Community college
attendance costs are dominated by living costs, not fees, and California is a
high cost-of-living state. Yet the data clearly indicates that the CCC system
is not taking full advantage of the federal student aid available. There seem
to be modest favorable trends, probably related to the substantial infusion of
$38 million in new Proposition 98 funds annually (beginning in 2003–2004)
into financial aid administration and outreach under the Board Financial
Assistance Program-Student Financial Aid Administration (BFAP-SFAA).36
Given that previously, system-wide spending on these functions was only
a little more than $50 million per year, the BFAP funds represent a very
significant boost. They very likely played a role in the improvements in aid
participation rates between the NPSAS 2000 and 2004 surveys.
The Chancellor’s Office has
Table 12
published two assessments of
CCC Pell and BOGW Share of Enrollment, 1999-2005
the new BFAP efforts, in May
Credit
BOG Fee
% Receiving
Pell
% Receiving
2005 (CCCCO 2005c) and August
Headcount
Waivers
Fee Waiver
Grants
Pell Grants
1999-00
2,488,631
459,376
18.5%
186,260
7.5%
2006 (CCCCO 2006), covering the
2000-01
2,605,949
485,311
18.6%
193,628
7.4%
2003–2004 and 2004–2005 years,
2001-02
2,769,794
533,715
19.3%
220,758
8.0%
2002-03
2,690,594
596,716
22.2%
239,927
8.9%
respectively. Table 12 shows the
2003-04
2,453,486
639,106
26.0%
246,112
10.0%
2004-05
2,439,443
700,618
28.7%
259,268
10.6%
system-wide changes between
Note: Highlighted years indicate years with additional BFAP-SFAA funding.
2002–2003 (before the new BFAP
Source: Chancellor's Office Data Mart, accessed 8/14/06. Credit headcount comes from special CO tabulation.
infusion) and 2004–2005 in the
number of Pell Grants and BOG
waivers obtained by students and also the percentage of credit enrollments
these numbers represent. Not surprisingly, as fees increased, the number of
36
Of the additional $38 million in new BFAP money provided in 2003–2004, $34.2
million was used for capacity building and administration, while $3.8 million was
used for a statewide media outreach campaign. In subsequent years, the media
campaign has been funded at $2.8 million.
23
California Community Colleges
waivers also grew, by more than 100,000 (17%) over the two years, or from
22.2% to 28.7% of students enrolled in classes for college credit. Pell Grants
also increased by almost 20,000, or 8.3%, over the two years.37 Among more
than 2.44 million students enrolled for credit, this represented only a rather
modest gain in the proportion served by Pell aid, from 8.9% in 2002–2003 to
10.6% in 2004–2005.38 Although these gains in BOG waivers and Pell Grants
are notable, if the NPSAS estimate that roughly half of CCC students in
2003–2004 had financial need by federal standards is at all close to the mark
(see Table 11), there is much to do to more adequately meet the needs of
CCC students, not to mention those who are deterred from enrolling by the
attendance costs they face.
The Chancellor’s Office report on the use and impact of the BFAP funds
in 2003–2004 indicates that districts and campuses had understandable
difficulties in utilizing the new resources in that first year (CCCO 2005c). The
money was not made available by the state until a very short time before
fall classes began and with little prior notice. On many campuses, existing
financial aid staffing had been minimal and oriented toward processing aid
forms, data management, and compliance reporting, not student outreach,
making it difficult for schools to absorb new funds or staff productively
for these purposes in a short time frame. Also, during a period of budget
stringency and freezes, schools experienced difficulties in getting new
hiring approved expeditiously through established personnel processes.
Finally, schools had understandable concerns about investing in permanent
professional staff when this “categorical” funding might not be continued, so
many positions were filled by temporary student workers.
A late state budget and declining enrollments that triggered reductions
in funding contributed to continued administrative hurdles in 2004–2005,
including the need to “repackage” students’ aid allocations after another late
fee increase and continuing difficulty in making permanent hires. One might
37
These figures are from the CCCCO Data Mart. The August 2006 BFAP report puts
the increase at more than 20,000 (CCCCO 2006).
38
Total credit enrollment includes all students enrolled in at least one course for
credit at any time during the academic year, and is not an indication of the number
of students enrolled in academic programs that make them eligible for Pell Grants.
While the Chancellor’s Office currently uses this indicator in its published reports to
measure growth in financial aid received by students, the Office is developing a more
effective method to gauge financial aid outreach efforts and aid receipt among those
eligible to receive such aid.
24
California Community Colleges
expect that most of these problems would have been resolved by the third
year (2005–2006), one in which no fee changes occurred.39
Although the official 2005–2006 report is not yet available, we can draw
some tentative conclusions based on interviews with Chancellor’s Office and
college-level staff at a few selected campuses and by examining campus-bycampus data. While the entire system saw a 6.5 percentage point increase in
the proportion of students receiving BOG waivers and a 1.7 point increase
in receipt of Pell Grants from 2002–2003 to 2004–2005, campus-to-campus
variation was significant. Of particular interest to us were campuses with
higher than average aid gains, and we interpreted strong growth in the Pell
receipt percentage as likely evidence of progress in improving financial aid
outreach practices and overcoming FAFSA aversion. Though fees are not an
insignificant sum for many students, particularly for those with low incomes
who can qualify for fee waivers, the FAFSA is the primary means for students
to obtain more significant aid from federal sources, as well as from Cal Grants
to assist with non-fee costs. FAFSA is, therefore, a key tool in an adequate
financial aid strategy.40
In our discussions with campus-level financial aid staff at several of the
more successful campuses,41 certain themes recurred with regularity. The use
of new BFAP dollars to hire professional staff rather than temporary student
workers was considered critical by these campuses, with one campus citing
the role of luck in navigating the extensive red tape usually involved in the
creation of new positions. Where student positions were still being created,
they were for clerical support and not intended for frontline contact.
We heard much from these more successful campus-level administrators
about the importance of encouraging students to file a FAFSA. One college
holds near-daily FAFSA workshops during which students are guided lineby-line through the complex application. Yet overcoming the messaging
39
The official report on these issues for that year will not be available until around
August 2007, but senior CCC staff have indicated that although conditions have
improved somewhat, challenges to permanent hiring have persisted.
40
Chancellor’s Office staff assert that growth in the proportion of BOG fee waivers
results from FAFSA applications rather than from the much simpler BOG waiver
application, but reliable data able to confirm this assertion is difficult to obtain
because of inconsistent reporting by campuses.
41
We emphasize that these interviews were limited in number and relatively
unstructured, so the findings should be interpreted as tentative only. They do,
however, point to possible directions for future, more systematic studies.
25
California Community Colleges
around aid and the cultural stigmas attached to it is often more challenging
than the application itself. Some administrators cited an aversion to grant aid
as a form of charity, particularly in Latino families. One director addressed
this by reframing grant dollars provided to students as an investment that
will be returned to the grantor (government or society) through increased tax
revenues on the student’s future higher earnings.
While the majority of staff interviewed did not find the Chancellor’s
Office BFAP-funded media outreach campaign noticeably useful to their
campuses,42 many employed similar methods, including radio advertising, for
their own more focused outreach to their particular populations. One college
mentioned the push toward a paperless office as a boon to outreach, and that
BFAP-funded technology initiatives enabled the office to better stay abreast
of students’ financial aid needs through such solutions as using automatic
triggers to notify staff when a particular student needs attention. This college
also created a one-credit transferable course designed to teach students about
financial aid opportunities and how to properly budget aid received, which
is taught in English and other languages. Other outreach strategies we heard
about included collaboration with other student services to reach students,
whether through jointly sponsored workshops or by sharing staff with the
Extended Opportunity Programs and Services (EOPS) program.
Recommendations Regarding Aid Outreach and Administrative Support
After two years of additional funding for financial aid administration and
outreach via BFAP (through 2004–2005), the still fairly modest gains in aid
take-up rates (especially Pell) demonstrate the need for a concerted effort to
identify, share, and disseminate effective approaches. The colleges with losses
in Pell participation (six) and those with little improvement over the two
years could probably learn a good deal from the colleges with strong gains
in Pell participation rates.43 But this can only occur if the Chancellor’s Office
makes a systematic effort to facilitate this learning process.
To thoroughly research and then take full advantage of best practices
across the system may require some additional resources for the Chancellor’s
42
This observation should probably be treated with particular caution in the absence
of a thorough study of the impact of this campaign on particular groups in specific
locations.
43
Some care is necessary, of course, in interpreting the two-year gain figures.
Campuses with strong gains might have been doing too little in the years before the
gains.
26
California Community Colleges
Office’s financial aid operations, to be used for such purposes as research,
publications for dissemination of best practices, conferences, training, and the
like, accompanied by accountability standards and mechanisms. Because the
colleges have strong incentives to boost BOG waiver numbers in order to help
sustain their enrollments and funding, one generally applicable strategy may
be to link the BOG waiver process more closely to incentives to complete the
FAFSA required for federal and Cal Grant aid. This could be accomplished
by mandating that BOG waiver applicants be offered a FAFSA application
opportunity, along with appropriate information about the benefits of federal
and state financial aid, and then be required to sign a form declining to
complete the FAFSA if the student so chooses after being informed.
The very low rates of CCC student participation in the federal student
loan programs also deserve attention. Although there are sound reasons to be
careful about which community college students take on loan debt given the
relatively low completion rates (see Burdman 2005), California’s students are
much less likely to borrow than community college students in other states
whose characteristics are not all that much different. Also, there are many
CCC campuses where the rates of loan participation are zero or near zero,
while at others the rates are much higher. Our interviews revealed a deep
resistance among some financial aid personnel to making students aware
of government-subsidized borrowing opportunities, as well as fears related
to federal penalties if default rates were high. Increasing loan participation
opportunities where appropriate would certainly require leadership and
training efforts, including support for diffusion of best practices, by the
Chancellor’s Office and perhaps more resources for financial aid counselors.44
The comparative data strongly suggest, however, that some such effort would
be desirable.
We also suggest that the effectiveness of the media outreach campaign
about financial aid that is part of the BFAP program be independently
evaluated. This campaign was funded at $3.8 million in 2003–2004 and $2.8
million in subsequent years. Clearly, this is a small amount if real strides
44
One issue that merits attention is how to devise acceptable approaches to loan
counseling that are not discriminatory but, instead, encourage those students with
substantial need (after grants) who have demonstrated good prospects for degree or
certificate completion to borrow from subsidized federal programs after they have
been educated about the pros and cons of borrowing versus working more hours or
dropping out. If well designed, such efforts should not lead to problematic default
rates, which are indeed penalized under federal policies.
27
California Community Colleges
are to be made in improving the awareness and understanding of financial
aid among many low-income populations across this vast state. But there
should be clear evidence that the messaging is effective before the campaign
is expanded. The Chancellor’s Office has made a start on such an evaluation
(see Meta Research 2005). This study suggests that target groups have heard
the message to some extent. It is unknown, though, whether they have acted
upon the information in significant numbers.
Finally, we note that, as a categorical program, the financial aid outreach
and administrative support program (BFAP-SFAA) has no formula-driven
impetus to help its funding keep up with inflation. It has been essentially
level-funded since its initiation in 2003–2004. In order to keep up with
increased personnel salaries and other rising costs and student needs, the
program’s funding should at least grow with inflation and enrollment.
Because financial aid administration and outreach remain underfunded in
the CCC system, more than this may be needed. Figure 3 shows how far
CCC financial aid administration spending per student lags the UC and CSU
systems even with the BFAP infusion. Given the population the community
college system serves, its needs in this area are arguably at least as great as the
other segments, although this is obscured by the continued focus on low CCC
fees as the key to the colleges’ affordability.
Figure 3
Financial Aid Administrative Dollars per Undergraduate Student, California Public Postsecondary Systems, 2004-05
$180
$160
$140
$152
$120
$100
$80
$79
$60
$40
$41
$20
$0
UC
CSU
Source: Chancellor’s Office, August 2006 BFAP Report.
28
CCC
California Community Colleges
Implications of Fee Policies for Financial Aid
CCC fee policy also works to reduce students’ ability to maximize the federal
aid and tax benefits they and, in the case of dependent students, their parents
receive. The federal Pell Grant program has a “tuition sensitivity” provision
that works to discourage very low tuition or fees by reducing the maximum
grant available to students when fees drop below the equivalent of $26
per credit. The enrollment fee rollback to $20 per credit effective in spring
2007 will have the effect, according to the California Legislative Analyst’s
calculations, of reducing the aid that California community college students
obtain by about $20 million per year unless federal rules are changed. Much
of the impact will fall on the neediest students, who tend to be the ones
eligible for maximum grants.45
A fee increase to a level above $26 per credit would bring in little, if
any, additional Pell Grant support, but would increase the tax credits and
deductions that families with tax liability could claim. Many middle-income
families who currently pay enrollment fees at the community colleges can
claim the Hope Scholarship tax credit for their entire fee expense,46 and
increases up to $33 per credit would still mean an after-tax fee burden of zero
for eligible students. Full-time fees of up to $66 per credit would represent an
after-tax fee burden of only $490 per year for Hope-eligible students. It should
be noted that fee increases need not affect needy students at all as long as the state
continues to provide funding for fee waivers according to current policies and
students and prospective students are made aware of how to apply.
In general, both the history and the current attitudes we discovered
around fees and financial aid in the CCC system suggest a continuing
tendency to focus too much on low fees as the major affordability problem and
on fee waivers as the primary solution. In light of the data, however, it is clear
45
In June 2006, the California Legislative Analyst’s Office (LAO) estimated that the
yearly impact of the $6 decrease in per-credit fees would be $20 million in reduced
Pell Grant awards for 263,000 of the system’s neediest students. In addition, LAO
estimated that the reduced fees would result in fee revenue losses of $83–$107 million
over an academic year. We are grateful to Jennifer Kuhn of the LAO education
policy and finance staff for providing these estimates and sharing their underlying
methodology.
46
However, only about 7% of CCC students/families claimed the Hope Scholarship
tax credit for the 2003–2004 academic year, according to SEARS data. Of those who
did not, more than half (54%) did not know about the tax credit. An information
campaign could play a helpful role here.
29
California Community Colleges
that non-fee costs should be recognized as the larger affordability concern
and aggressive steps taken to expand financial aid efforts. Later, we suggest
the possibility of increasing fees in a measured way, matched by increased
state appropriations, to generate a pool of funds that would expand financial
aid for the attendance costs that needy students face, as well as to enhance
services that facilitate student persistence and completion.
30
California Community Colleges
Fee Increases and Enrollments
If modest fee increases are to be considered as part of a package of policy
reforms in community college financing, it is important that the relationship
between fee changes and enrollments be explored. Economic theory predicts
that, all other things being equal, when the price of a good or service goes up,
demand for it will decline. That this relationship applies to tuition (or fee)
“prices” in higher education is well documented in the empirical literature,
which uses multivariate statistical models to isolate the effects of tuition from
those of other variables (for reviews of this literature, see Leslie and Brinkman
1988; Heller 1997). Generally, empirical studies have found that two-year
college enrollments are especially sensitive to price (Heller 1999; Kane 1999,
101–115; Ellwood and Kane 2000). Based on a fifty-state analysis covering the
years 1980–1992, Kane (1999, 115) estimates that a 1% increase in price might
induce a decrease in the enrollment (participation) rate in two-year colleges
approaching 1%, although most studies arrive at somewhat lower “price
elasticity” values. Both Kane and Heller (1999) find that state spending on
need-based financial aid mitigates the effect of tuition on enrollment but does
not eliminate it when the effect of a dollar of aid spending is compared with
that of a dollar of price change.
Yet it is not clear how well these findings apply to the California
Community Colleges. There is reason to believe that price elasticity may be
less at very low prices, such as those that apply in California. Intuitively,
an increase in the price of a three-credit course from $33 in 2002–2003 to
the current (fall 2006) price of $78 would seem to be more manageable for
students than the same percentage increase from an initial price of $234,
which is approximately the national average tuition rate for a three-credit
course at community colleges. Indeed, the only study we were able to find
that is specific to California (Shires 1995, cited in Heller 1997) reported a price
(fee) elasticity value for CCC enrollments of about one-fifth of that suggested
by Kane. In short, while fee increases no doubt impact community college
enrollments, the effects will most likely be modest at very low prices as long
as the increases are not large in dollar terms. Because the effects tend to be
larger for those with low incomes, the literature suggests that the effects can
be mitigated a good deal by need-based financial aid. To our knowledge, the
empirical literature has not explored the effect of fee waivers that reduce the
31
California Community Colleges
price to zero, as in California, but the effects should be substantial if students
know to apply for the waiver.
From theory, we now turn to the examination of recent enrollment
patterns in the California Community Colleges during the period of budget
reductions and fee increases that occurred in the early part of the present
decade. This evidence suggests that other factors, especially course reductions
and the distribution of these, had at least as much effect on enrollment
patterns as did fee increases.
Setting the stage (2002–2003): Prior to fee increases, enrollments slowed while
system funding and course sections were cut.
Table 13 shows the recent history of enrollments in the California Community
Colleges and indicates when changes in the enrollment fee took place.47
After steady increases dating back to the early 1990s, headcount enrollments
(column 3) barely grew in fall 2002 (+0.4%) and declined by 3.1% in spring
2003. Note that
Table 13
this was before the
Enrollments and Course Sections
fee increases took
%
Headcount
%
Course
%
Enrollment
effect but also
Term
FTES
Change
Enrollment
Change
Sections
Change
Fee
Fall 1999
451,486
2.3%
1,548,036
1.8%
157,015
0.1%
$12
when the system
Spring 2000
448,629
–0.6%
1,571,045
1.5%
160,728
2.4%
$11
was feeling the
Fall 2000
459,573
2.4%
1,585,350
0.9%
160,697
0.0%
$11
Spring 2001
456,034
–0.8%
1,637,156
3.3%
165,906
3.2%
$11
effects of a $49
Fall 2001
481,568
5.6%
1,686,963
3.0%
166,735
0.5%
$11
million cut in total
Spring 2002
497,199
3.2%
1,741,434
3.2%
172,811
3.6%
$11
Fall 2002
504,748
1.5%
1,748,361
0.4%
170,373
–1.4%
$11
funding, which
Spring 2003
489,884
–2.9%
1,694,873
–3.1%
164,597
–3.4%
$11
Fall 2003
493,580
0.8%
1,634,550
–3.6%
160,573
–2.4%
$18
led to substantial
Spring 2004
480,300
–2.7%
1,619,514
–0.9%
165,261
2.9%
$18
reductions in
Fall 2004
482,768
0.5%
1,606,100
–0.8%
165,289
0.0%
$26
Spring 2005
474,966
–1.6%
1,599,924
–0.4%
171,325
3.7%
$26
course offerings.
Fall 2005
493,928
4.0%
1,606,858
0.4%
171,248
0.0%
$26
Course sections
Change,
Fall 02–Fall 05
–10,820
–2.1%
–141,503
–8.1%
875
0.5%
136.4%
offered (column 5)
fell by more than
Note: Highlighted terms indicate terms with fee increases.
Source: Chancellor's Office Data Mart, accessed 8/21/06. Course section data comes from special CO tabulation.
2,400 in fall 2002
and by another
5,800 in spring 2003 for a total reduction in courses available of 4.8% (CCCCO
2005a, 12).
47
Data in this section and Table 1 come from the California Community College
Chancellor’s Office Data Mart (http://www.cccco.edu/divisions/tris/mis/reports.
htm) and two reports from the CCC Chancellor’s Office dated April (2005b) and
December (2005a).
32
California Community Colleges
Fee increase from $11 to $18 per credit (2003–2004): Enrollment fell while fees
increased and course sections continued to decrease.
The first fee increase in 2003–2004 was accompanied by a further decrease
in courses offered, this time numbering 4,000, in the fall, followed by the
recovery of these courses and a few more in spring 2004, leaving the course
count at that point about 4.4% below the spring 2002 peak. The combined
effects of the course cuts and fee increases were presumably the primary
culprits in the further drops in headcount enrollments of 3.6% in fall 2003
and another 0.9% in spring 2004. Another significant factor was at work in
both 2002–2003 and 2003–2004. The system cut back sharply in those years on
special admit (K–12) students in physical education courses, accounting for
more than 25,000 of the headcount decline in 2002–2003 and more than 71,400
in 2003–2004.
Headcount enrollment in spring 2004 was lower by 121,920, or 7%,
than the figure two years earlier, and term full-time equivalent student
(FTES) enrollment (column 1) was down 16,899, or 3.4%, over the same time
period.48 Compared with pre-budget-cut enrollment projections (2001), the
Chancellor’s Office calculated that enrollments were down by about 160,000
headcount in fall 2003 and more than 240,000, or 13%, in fall 2004 (CCCCO
2005a, 10 Table 3).
Fee increase from $18 to $26 (2004–2005): With increases in course sections as
well as fees, enrollment declines slowed significantly.
The next academic year, 2004–2005, saw a further jump in fees from $18 to
$26 per credit. Course sections remained steady in fall 2004, but recovered
substantially (+6,036) in spring 2005 (CCCCO 2005a, 9).49 This left the
total course count at about 1,500 (0.9%) below the spring 2002 peak. Term
headcount enrollments continued to fall during this year but more modestly,
dropping 1.2% from spring 2004 to spring 2005, with this term’s figure about
140,000, or 8.1%, below spring 2002.
Annual FTES enrollment counts generally tell the same story, although the
48
Note that if the special admit K–12 physical education students are excluded,
the difference between spring 2002 and spring 2004 is somewhat smaller: –5.5% in
headcount and –2.7% in FTES.
49
The CCC system’s total funding increased by 9% in 2004–2005 over the previous
year, but this figure was barely higher than that of 2001–2002 (without adjustment for
inflation).
33
California Community Colleges
declines are considerably smaller than for headcounts. From an FTES peak of
504,748 in fall 2002, there was a decrease of 4.4% by fall 2004. Spring terms,
which generally have lower FTES than fall terms, showed a 4.5% decrease
from 2002 to 2005.
After the increases (2005–2006): With no change in fees or course sections,
enrollment indicators showed some signs of recovery. Enrollment gains
overall did not, however, translate into growth in first-time students.
The beginning of the following academic year, 2005–2006, showed some signs
of improvement. Fall 2005 was the first term with an enrollment increase,
albeit a small one (0.4%), since fall 2002, leaving the later term’s enrollments
down 8.1% from the 2002 peak. The first increase in fall-to-fall or spring-tospring FTES since fall 2002 also occurred in fall 2005, with a 2.3% gain in FTES
over the fall 2004 term. This increase still left fall 2005 FTES down 2.1% from
2002. Course sections remained essentially flat and still slightly below the
spring 2002 peak.
Understandably, CCC officials are especially concerned about trends
in first-time enrollees because these students are likely to be particularly
sensitive to fees and course availability, and their numbers are a predictor
of future enrollment totals. Table 14 shows the trend in these (headcount)
enrollments from fall to fall (left columns)
Table 14
and spring to spring (right columns). The
First-Time and First-Time Transfer* Students by Term
majority of students enroll for the first
Academic
Fall
%
Spring
%
Year
Term
Change
Term
Change
time in the fall term, and the declines in
2000–01
452,124
3.8%
334,616
6.1%
this bellwether group were steady through
2001–02
490,317
8.4%
361,338
8.0%
2002–03
511,179
4.3%
333,465
–7.7%
fall 2005 and sobering: First-time student
2003–04
449,986 –12.0%
321,247
–3.7%
headcount was down by more than 83,000,
2004–05
452,880
0.6%
331,930
3.3%
2005–06
428,043
–5.5%
313,723
–5.5%
or 16.3%, from the fall 2002 peak to fall
Change,
2005. The headcount and FTES enrollment
2002–3 to 2005–6
–16.3%
–5.9%
increases experienced in fall 2005 were not
* First-Time Transfer students are those who transferred to the reporting college from
another institution.
mirrored in this group, whose enrollment
Source: Chancellor's Office Data Mart, accessed 8/21/06.
declined 5.5% over the previous fall.50
The changes in all the above indicators are summarized graphically in
Figure 4.
50
The improved economy and labor market may well be playing a role here, but
the large difference between the trend in first-time enrollments and that in total
enrollments is puzzling.
34
California Community Colleges
Figure 4
CCC Courses and Enrollment Indicators
Significant Economic Activity Noted
Fall 2002 = 100 for all indicators
105
FTES (Fall 2002 = 504,748)
Course Sections (Fall 2002 = 170,811)
Headcount (Fall 2002 = 1,748,361)
Fall FT/FTT (Fall 2002 = 511,179)
$12/credit
$11/credit
Decrease
in System
Funding
$18/credit
Fall
2002
Fall
2003
$26/credit
100
Index Score
95
90
85
80
Spring
1999
Fall
1999
Spring
2000
Fall
2000
Spring
2001
Fall
2001
Spring
2002
Spring
2003
Spring
2004
Fall
2004
Note: Fall FT/FTT line represents fall term data only. No conclusions should be drawn from the appearance of Spring term estimates.
Sources: CCCCO Datamart (FTES, Headcount, Fall FT/FTT) and CCCCO reports and personal communication (Course Sections).
Differences by Demographic Categories and Student Goals
The Chancellor’s Office has analyzed the recent enrollment declines by
various demographic categories and students’ stated educational goals.
Headcount enrollments fell for all ethnic groups. As seen in Figure 5, the
declines began earliest and were largest for Native Americans and whites
(–16.9% and –16.7%, respectively, from their peak enrollment in spring 2002
through fall 2005). For the other major ethnic groups, enrollments peaked in
fall 2002 and then fell by fall 2005 as follows:
• Asian/Filipino/Pacific Islander –6.4%
• African American
–5.4%
• Hispanic
–2.0%51
51
Calculated from data obtained from the CCCCO Data Mart, accessed August 14,
2006.
35
Spring
2005
Fall
2005
California Community Colleges
Figure 5
CCC Enrollment by Ethnicity, Spring 1998 to Fall 2005
Indexed to Fall 2002 = 100
African-American
Hispanic
Asian/Filipino/PI
Native American
White
110
Index Score
100
90
80
70
Spring
1998
Fall Spring
1998 1999
Fall Spring
1999 2000
Fall Spring
2000 2001
Fall Spring
2001 2002
Fall Spring
2002 2003
Fall Spring
2003 2004
Fall Spring
2004 2005
Fall
2005
Source: Chancellor’s Office Data Mart, accessed 8/14/06.
The net effect of these patterns was that by fall 2005, the proportion
of white students in the CCC system had fallen by 3.9 percentage points
compared with spring 2002, while the proportion of Hispanic students
had increased by 2.2 points, with only minor changes in the shares of other
groups.52 These trends are broadly in line with those in the state’s population
demographics. The key point, though, is that all ethnic groups experienced
significant declines in enrollment.
The Chancellor’s Office also sought to analyze any differential enrollment
impact on low-income students by investigating whether the number of
students from low-income ZIP codes decreased more than proportionally
between fall 2002 and fall 2004. It found no evidence of disproportionate
impact by income (CCCCO 2005a, 23–26), which simply means that
enrollments among low-income students declined similarly to those of other
income groups. This trend, together with the relatively smaller enrollment
52
It should be noted that the percentage of students whose ethnicity was unknown or
who declined to state ethnicity increased by one percentage point over this period.
36
California Community Colleges
declines among minority groups (except Native Americans), might be
regarded as a silver lining in the dark cloud of enrollment declines at a time
when the state needs college enrollments to grow. These trends suggest that
efforts to mitigate impacts on more vulnerable population groups probably
had some effect.
The most telling point regarding demographics is the sharply differential
enrollment patterns over the 2002–2005 period across age groups (Figure 6).
Headcount of students aged 25 and older fell by almost 140,000, or 14.4%,
Figure 6
CCC Fall Enrollment by Age, Fall 1999 to Fall 2005
Indexed to Fall 2002 = 100
110
18-19
25 to 29
20 to 24
30+
Grand Total
Index Score
100
90
80
Fall 1999
Fall 2000
Fall 2001
Fall 2002
Fall 2003
Fall 2004
Note: Fall terms only are compared due to quite different enrollment patterns by term for some age groups.
Source: Chancellor’s Office Data Mart, accessed 8/14/06, and special calculation by the Chancellor’s Office.
from fall 2002 to fall 2005, while 18- to 24-year-old students actually increased
their numbers by about 10,000, or 1.3%.53 Spring term comparisons from
2002 and 2005 demonstrate similar trends: Enrollments of students aged 25
and older fell about 127,000, or 13.7%, while enrollments of those aged 18–24
53
Calculated using data from the CCCCO Data Mart and data specially prepared and
generously provided by the Chancellor’s Office. The gain for younger students was
much smaller than the previous three-year gain of 15.9% from fall 1999 to fall 2002.
37
Fall 2005
California Community Colleges
increased by 30,000, or 4.3%. These disparate patterns by age are likely related
to the finding that students who indicated that their educational goal was to
receive an associate degree or to transfer to a four-year institution were only
slightly less numerous in 2004–2005 than in the peak year for these categories
(2002–2003). The number of students who indicated goals more commonly
associated with older students (to obtain a vocational certificate, other
workforce training goals, personal interest), as well as those with “undecided”
and “unknown” goals, decreased more sharply.54
Contributing Factors Other than Fees
These patterns offer some clues as to the influence of fee increases and course
section cuts, as well as other factors, during this period of enrollment decline.
While younger students seeking degrees and/or to transfer are the most likely
student group to attend full time, and so might theoretically face the largest
impact from fee increases, they are also the most likely to take advantage of
BOG fee waivers and other forms of financial aid, in part because they have
been the main target of recent financial aid outreach efforts. These efforts
probably had a significant impact in mitigating the effects of fee increases
for the needy students in this group. Older and part-time students and those
not seeking a degree are not eligible for some aid programs. When they are
eligible, the programs are not well designed for their needs. We also learned
that financial aid outreach efforts on campuses are less likely to target these
students.
Another contributor to the patterns of enrollment decline by age and
objective was the nature of the course and section reductions the colleges
made. The mix of course cuts was largely a function of the interplay between
the costs of different types of offerings––e.g., occupational courses tend to
cost more than transfer courses––and the fact that more temporary faculty
teach courses that are classified as occupational and/or not transferable. At
our request, Chancellor’s Office staff disaggregated the counts of courses
and sections offered each term through spring 2005 by transferable/nontransferable status and by occupational versus non-occupational orientation.55
This data is depicted in Figure 7.
54
Enrollment data sorted by student educational goal was specially prepared and
generously provided by the Chancellor’s Office.
55
We are indebted to Patrick Perry, CCC Vice Chancellor for Technology, Research,
and Information Systems, for providing this data, which extends that of Tables 6 and
7 in CCCCO 2005b, 12–13.
38
California Community Colleges
Figure 7
CCC Course Sections by Transferable and Occupational Status, Fall 1999 to Fall 2005
Indexed to Spring 2002 = 100
105
Transferable
Occupational
Non-Transferable
Non-Occupational
Total Course Sections
Index Score
100
95
90
85
Fall
1999
Spring
2000
Fall
2000
Spring
2001
Fall
2001
Spring
2002
Fall
2002
Spring
2003
Fall
2003
Spring
2004
Fall
2004
Source: Chancellor’s Office, 2005a and 2005b, and special calculation by the Chancellor’s Office.
Transferable sections were reduced by 6.2% from spring 2002 to fall 2003,
but quickly recovered after this and surpassed their previous peak by spring
2005. Non-transferable sections fell more sharply, by 8.9%, from spring 2002 to
fall 2003, and had not fully recovered by fall 2005 (they were still 4.7% below
the spring 2002 peak). Similarly, non-occupational course sections, which
are more likely to serve younger students, were reduced by 5.4% by fall 2003
from their peak point a year earlier, but recovered steadily after that, reaching
a new high in spring 2005 and another in fall 2005. Occupational course
sections, which attract a larger number of older students, on the other hand
were reduced more sharply—down 11% between spring 2002 and fall 2003—
and experienced a partial and fitful recovery thereafter. In fall 2005, there were
still 7.7% fewer of these sections than at the spring peak three years earlier.
In short, it seems clear that the distribution of courses played an important
role, along with fee increases and the nature of financial aid programs and
39
Spring
2005
Fall
2005
California Community Colleges
outreach strategies, in the disparate pattern of enrollment changes that
occurred in the community colleges during these years. If degree and transferoriented students and younger students are seen as the most critical groups
to retain through a budget setback, the system seems to have been fairly
successful at prioritizing them, whether by design or not.
In any case, it is clear that the fiscal dislocations threw the California
Community Colleges well off their previous track of steady enrollment gains.
The impacts on enrollment continue to be felt, although the stagnation of the
last year or so probably has as much to do with labor market conditions as
with anything else. The enrollment stagnation is certainly undesirable at a
time when the state’s population is growing and changing rapidly. Increasing
enrollment requires more than commensurate growth in the capacity of these
key institutions. All in all, we think the evidence just reviewed suggests that
very moderate, predictable fee increases, such as those we propose later, will
not have untoward effects on enrollment. Rather, moderate fee increases that
are not accompanied by course reductions but instead are paired with fee
waivers for the needy and with our recommended steps to improve financial
aid accessibility should enhance both access and chances for success for most
students.
40
California Community Colleges
The Role of Cal Grants
The Cal Grant program of state scholarships and grants was designed at
the time of the original Master Plan for Higher Education in 1960 to provide
aid to students attending private colleges and universities. Over the years,
as fees were initiated in the University of California and California State
University systems, the programs came to serve these students as well. At
the community colleges, many vocationally oriented students received small
Cal Grants from a separate program started in 1973–1974. (See Table 15 for a
summary description of the various Cal Grant programs and their eligibility
criteria.56) But community college students received comparatively little Cal
Grant support until significant changes in the program were implemented in
2001–2002. Although this was not the primary goal, some of these changes
had the effect of making the Cal Grant program more accessible to CCC
students.
Table 15
The creation of separate entitlement
Comparison of Cal Grant Program Requirements
and competitive grant programs was
Number of
designed to assure graduating high
Awards
GPA
Age
Income
school students an affordable education
High School Entitlement Program
Cal Grant A
3.0
Recent
Low/Middle Income
All eligible
through the entitlement program, as
Cal Grant B
2.0
HS Grads
Low Income
well as to provide a limited number of
High School Entitlement Program
Cal Grant A
2.4 from
24 or
Low/Middle Income
All eligible
competitive grants for those generally
Cal Grant B
CCC
Younger
Low Income
older students not meeting entitlement
High School Entitlement Program
Cal Grant A
3.0
Low/Middle Income
22,500
eligibility requirements. By statute, one
Cal Grant B
2.0
None
Low Income
Cal Grant C
7,761
None
Low/Middle Income
half of the competitive grants are set
aside for community college students,
Source: Adapted from CSAC, 2006-07 Cal Grant Comparison
with a separate application deadline
of September 2 to better match CCC application and enrollment patterns.
Largely in response to the entitlement grants, the total aid dollars awarded
through Cal Grants (all segments) increased 59% in the first four years after
the changes (CSAC 2006b).57
56
It should be noted that Cal Grant A awards are not actually used by CCC recipients
while they are community college students. Because these awards are “reserved” for
use at a four-year college or university after the student has transferred, not all of
them are activated.
57
Data were compared from reports for 2004–2005 (most recent year available) and
2000–2001.
41
California Community Colleges
The changes have proven particularly beneficial for community college
students, who in 2005–2006 were awarded 48% of all A and B Cal Grants,
compared with 36% in 2000–2001, the year before implementation of the twotiered system. Over the same period, the number of B grants awarded to CCC
students––this is the major program benefiting them––more than doubled,
increasing from 17,831 to 39,464. Table 16 depicts these favorable trends. In
addition, about 5,000 CCC students per year receive new Cal Grant C awards,
which provide small grants for the purchase of books and tools for students
enrolled in vocational programs.
However, of about 113,000 CCC
students and prospective students offered
Entitlement
Competitive
new or renewal Cal Grants of any type
Percent of All
Number of
Percent of All
Number of
in 2004–2005 (CSAC 2005b), only about
Cal Grant B
CCC Student
Cal Grant B
CCC Student
Awards
Awards
Awards
Awards
65,000 actually received Cal Grants that
2001–02
41.1%
13,834
69.9%
14,949
year (CCCCO Data Mart).58 Regardless,
2002–03
44.7%
19,073
76.2%
17,341
2003–04
46.5%
19,493
76.3%
16,146
Cal Grant receipt rates show the same
2004–05
48.9%
21,654
76.6%
16,497
positive trends as awards: Cal Grant B
2005–06
48.3%
22,499
76.7%
16,965
dollars going to CCC students grew by
Source: CSAC, Fast Facts at Your Fingertips Entitlement and Competitive Reports for the
academic years shown.
184% in the first four years (2000–2001 to
2004–2005) after the changes, and the number of students served grew 188%
(CCCCO Data Mart).
Table 16
CCC Student Receipt of New Cal Grant B Awards
Still, the number of Cal Grants either awarded or received represents a
small share of the 2.44 million students enrolled for credit in the community
colleges. As the NPSAS state comparisons showed (refer to Table 7), California
community college students’ access to such state grants remains substantially
less than is typical elsewhere. Also, mostly due to the large differences in
fees across the segments, the community colleges’ share of Cal Grant dollars
is relatively small and shrinking. In 2005–2006, CCC students received 43%
of new and renewal Cal Grant Bs, but only 16% of all Cal Grant B dollars,
because a growing share of these dollars is going toward offsetting increasing
tuition charges at four-year institutions.59
58
The difference arises when awardees decide to attend a different segment or do not
enroll at any California institution.
59
Authors’ analysis of CSAC special tabulation.
42
California Community Colleges
Possible Changes to Cal Grants
There are a number of adjustments that might be made to the Cal Grant
eligibility rules and other provisions that would facilitate greater access by
community college students without deemphasizing the academic merit
component of the criteria (Table 15). Among these are:
• Relax the March 2 application deadline for the Entitlement awards for
community college students, who tend to apply to college later than
this.
• Increase the number of Competitive awards. In part a response to
the late application problem, the 2001–2002 revisions set up the
Competitive Awards program, in which half the awards are reserved
for CCC students. However, only 18% of CCC student applicants
meeting all eligibility criteria in 2005–2006 were offered Cal Grants. If
the number of Competitive awards were more adequate compared with
the demand, this could obviate the need to relax the March 2 deadline
for Entitlement awards.
• Relax the limitations on age or time since high school graduation,
which eliminate many older community college students from some
of the programs. High school Entitlement awards are available only to
students who graduated from high school within a year prior to the
award, while transfer Entitlement awards require, for 2006–2007, that
the applicant be under 24 and have graduated no earlier than 2001–
2002. Competitive awards are open to older students but, as noted,
their numbers fall far short of the number of eligible applicants.
• Increase the value of the “access costs” provided under Cal Grant B
awards. In addition to a fee waiver, Cal Grant B recipients receive a
grant of $1,551 for their other costs of attendance. As we have seen,
most needy students in the CCC system have officially determined
needs, even after aid, that far exceed this figure. Since the inception
of these awards in 1969–1970, their dollar amount has risen only 72%,
and just 15% in the last twenty years. If this initial amount had merely
kept pace with the California Consumer Price Index (CCPI) over the
years since the program’s inception, much less with the special costs
facing students, it would be $5,190 in 2006–2007, or more than triple the
current $1,551 award (Figure 8). Increasing the value of this access grant
is the best way to ensure that the CCC share of Cal Grant B dollars does not
continue to decrease.
43
California Community Colleges
Figure 8
Cal Grant B Maximum Access Grant Award Level and CCPI, 1969-70 through 2006-07
Indexed to 1969-70 = 100
Access Grant
650
CCPI
$152
550
Index Score
450
$79
350
$41
250
150
50
1969–70
2006–07
Note: CCPI for 2006-07 is a Department of Finance estimate.
Sources: California Department of Finance, California Postsecondary Education Commission
• Increase the value and number of Cal Grant C awards, which have
by statute remained at the 2000–2001 level of 7,761 awards, despite
significant numbers of eligible but unserved applicants. Had the dollar
amount of the non-fee Cal Grant C increased with inflation since its
inception in 1973–1974, it would be $2,375 in 2006–2007. Instead, it is
only $576, representing an increase of just 15% over more than thirty
years.
• The Cal Grant programs provide no administrative cost allowance
whatsoever, although CCC financial aid staff report that of the
aid programs they deal with, Cal Grants are the most complex to
administer. Federal programs at least provide modest administrative
allowances. This issue merits further investigation that is beyond the
scope of this project. We do believe that CCC financial aid operations in
general remain underfunded relative to the needs they must address.
A reasonable administrative cost allowance related to Cal Grants might
play a part in a program aimed at alleviating this gap.
44
California Community Colleges
Of course, all such suggestions would require additional funding. In our
view the highest priorities would be:
1.
To increase the long-stagnant value of the “access costs” amount
provided in the Cal Grant B awards because this addresses the
rising cost of attendance that CCC (and other) students face; and
2.
To begin increasing the statutorily set number of Competitive
awards in order to address the large number of eligible but
unserved applicants in this program.
At a minimum, increased funding for these purposes should be
applied in a way that responds to both inflation and increases in eligible
applicant numbers over time. A more ambitious program is outlined in the
recommendations section below, cost projections for which can be found in
Appendix B.
A different approach to Cal Grant reform could involve taking
approximately the resources now provided to CCC students through Cal
Grants and creating a new program designed just for them. This could
have design features friendlier to the wide range of community college
students, including minimal deadlines, fewer age requirements, relaxed
restrictions on time after high-school graduation, award numbers linked to
the number of eligible students, and ideally more ample access cost awards.
Such a community colleges-only program would not be constrained by the
imperative to also meet the needs of university students, who would continue
to be served under essentially the existing Cal Grant program. Awards might
also be permitted to have unique features appropriate to the populations
served by different community college campuses.
While such an approach has some appeal, it has the disadvantage that,
from a broad student choice perspective, it might tend to channel some
students into community colleges who could have secured Cal Grant awards
to attend UC, CSU, or a private four-year institution, where their chances
for successful bachelor’s degree completion, were that their goal, would
generally be substantially higher. Moreover, a separate community college
program might weaken the capacity of the higher education sector as a whole
to secure support for student aid in Sacramento, and the community colleges
might fare less well on their own relative to the other segments in securing
funding. On balance we would not recommend this approach at this time.
45
California Community Colleges
Summary of Major Conclusions and Recommendations
Affordability Is Tied More to Non-Fee Costs of Attendance than to Fees
A key overarching conclusion is that, in regard to the California Community
Colleges, affordability is mostly about non-fee costs. Even at 2005–2006 levels,
fees only represented at maximum about 5% of the total cost of attendance, i.e.,
for a full-time student without a fee waiver living apart from parents. Nearly
30% of credit students—and more than 50% of full-time students—have their
fees waived, and no doubt more are eligible for waivers. Non-fee costs that
play a large role in community college students’ budgets, such as housing,
transportation, textbooks, and—for some—health care and child care, have
climbed in recent years at rates far exceeding the general cost of living (Figure
2) with no end in sight.
Many students who attend or seek to attend California’s community
colleges need access to financial aid to cope with these costs. Yet the colleges
have almost no aid resources themselves, and their students access federal and
state aid programs at rates substantially lower than those of community college
students in other states (see Tables 6 and 7). These patterns originate from
a long-held notion in the CCC system itself and among state policymakers
that focusing on student financial aid is unnecessary because fees were
nonexistent (prior to 1984) or very low. To some extent, this attitude persists
in both quarters, though in recent years the state and the CCC system have
begun to invest in financial aid outreach to students and to build necessary
administrative capacity, and these investments are beginning to show some
positive results. Nonetheless, participation rates in federal Pell Grant, and
particularly loan programs, remain comparatively low across all categories of
students. According to the NPSAS data, in 2003–2004 substantial percentages
of all student categories––and more than half of full-time students––had
unmet need after their expected contribution (EFC) and all aid were taken
into account. Moreover, unmet need was highest among the lowest-income students.
Clearly there is a real need to further increase capacity in the system to assist
students in obtaining federal aid, including loans where appropriate.
The state can have a direct influence on the availability of aid to
community college students through its Cal Grants program. Our comparisons
of California community college students with their peers in other states using
46
California Community Colleges
the NPSAS 2004 data show that fewer California students receive state grants
than do students in other states (Table 7). The redesign of this program in 2001–
2002 increased the number of community college students receiving grants, but
more could be done (see the Major Policy Recommendations section below).
A key consequence of the unmet need for financial aid is that CCC students
work too much. According to the NPSAS 2004 data, 81.5% worked an average
of 32 hours per week, while 43% worked essentially full time (35+ hours)
(Table 9). These patterns almost certainly contribute to the CCC system’s low
persistence, completion, and transfer rates among students who begin with
such goals. A small but hopeful sign is that student work decreased a bit
between 1999–2000 and 2003–2004 as financial aid acquisition rates increased
modestly.
Fee Policies and Their Implications
As already suggested, we believe that CCC fee policies are closely intertwined
with financial aid issues. The effect of the planned fee rollback to $20 per credit
is one obvious example. Unless the Pell program’s “tuition sensitivity” feature
is removed when the federal Higher Education Act is reauthorized (or some
other change is made), this rollback will reduce maximum Pell Grants to the
neediest CCC students by some $20 million per year.
On the positive side, recent efforts to expand the use of fee waivers linked
to the fee increases of 2003–2004 and 2004–2005 have borne fruit. Waivers
increased by more than 100,000 over these two years and jumped from 22%
to 29% of the student body. A substantial share of students do not pay fees
at all, and the proportion is above 50% among full-time students. Additional
outreach efforts to needy students can probably increase this share even more.
During the recent period of fee increases, aggregate CCC enrollments
fell, but the decreases were concentrated in the part-time and older student
populations whose fee payments would still have been quite modest—
typically $156 a term, or a $90 increase, from 2002–2003 to 2005–2006 for a
part-time student taking six credits—and who also bore the brunt of budgetinduced course cutbacks. Enrollments of students aged 18–19 actually
increased over these years, though almost certainly less than they would have
grown under more favorable conditions. While the decline (and current near
stagnancy) in overall enrollments should be a policy concern, it is far from clear
that increased fees were the primary culprit.
47
California Community Colleges
Even at 2005–2006 levels of $26 per credit, CCC fees were about 38%
below the next lowest state (North Carolina) and around one-third of the
national average for two-year colleges (College Board 2005). Because state
and local funds provided under Proposition 98 funding arrangements
appear to be near the national average, the very limited revenue generated
from fees by the system contributes significantly to its comparatively low
overall funding level. These arrangements seem to sap the will in the CCC
system for anyone to advocate for fee increases that could increase resources
because, historically, additional fee revenue has always been used to reduce
Proposition 98 funding. We suggest below how this basic problem might be
addressed.
Major Policy Recommendations
It follows from the above findings and analysis that affordability policies for
the California Community Colleges should shift emphasis from low fees per
se to increasing the financial aid available to students to meet their non-fee
attendance costs. Accomplishing this shift requires changes in three key areas:
• CCC Financial Aid Administration and Outreach
• Cal Grant Programs
• Fee Policy and System Improvements
Specific recommendations for changes within each area are discussed
below.
CCC Financial Aid Administration and Outreach
• Expand the BFAP program to secure more federal aid for students
• Research and disseminate best CCC practices
• Take steps to increase the FAFSA application rate
We urge that the Chancellor’s Office’s financial aid outreach and capacitybuilding effort (BFAP), which has shown signs of success, be continued and
expanded. Substantial increases in funding for this effort should be contingent on first
systematically studying the strategies among colleges that have led to greater success
in both media-based outreach and in working with students and would-be students
on the ground. Demonstrably successful approaches (best practices) should
then be disseminated and diffused via publications, conferences, training,
and similar methods. The reporting of implementation, performance, and
48
California Community Colleges
evaluation data needs to be timely and credible, and policy overseers need to
pay attention to it. Because Pell Grants represent federal resources brought
into the state to serve Californians, Pell Grant participation rates should get
the most attention in this effort. Because the BFAP program’s current funding
is actually lower than it was in 2003–2004, the program should receive
annual appropriations increases tied to inflation until this BFAP program
development initiative is complete.
One strategy for increasing Pell participation that should be seriously considered
is to link student FAFSA completion more closely to the BOG fee waiver process. For
example, financial aid staff could be asked to present essential information to
waiver applicants about the benefits of federal aid (and Cal Grants) and the
need to complete a FAFSA to be eligible. Staff could also point out resources
to help with the application process. Students could be required to sign a
form explicitly declining to complete the FAFSA before the waiver could be
approved.60 Whatever method is chosen, the expanded financial aid outreach
effort should also include a new initiative to expand information about and
encourage appropriate utilization of subsidized federal loans. Progress on
encouraging appropriate loan applications and receipt should also be part of
the performance reporting and accountability system.
Cal Grant Programs
• Increase the number of Competitive awards
• Substantially increase the value of “access cost” awards
• Adjust award value annually
The state could seek to expand community college students’ access to
financial aid directly by further adjusting the design and funding of particular
Cal Grant programs. We believe the highest priority changes should be to:
1. Provide more Competitive awards for the many eligible but unserved
applicants who don’t fit the eligibility criteria for Entitlement awards
(which are reserved for recent high school graduates who meet the March
2 application deadline). The increase in Competitive awards should at least
be in line with demand growth from the current statutory figure of 22,500
awards, which has not changed since 2001–2002. Ideally, the state would set a
more ambitious target of serving, perhaps, 25% of eligible applicants.
60
An alternative would be to require this step only on campuses with low FAFSA
completion rates.
49
California Community Colleges
2. Increase the value of the awards for “access costs” under Cal Grant B
as much as possible from the current, long-stagnant, and inadequate $1,551
(just 30% of the inflation-adjusted value of this award when it was initiated in
1969). We suggest setting a plausible target, such as a substantial percentage
of the original value of these access awards in terms of current dollars over
five or ten years. (The original awards would be worth $5,190 in 2006–2007
dollars.) For discussion purposes, cost projections for possible increases in
the access grant’s value and the supporting methodology are described in
Appendix B. In light of the long stagnancy in the value of these awards, we
recommend at minimum a substantial one-time boost in the amount of the
award, and then that the award amount be increased roughly in line with the
growth in students’ costs of attendance over time, except perhaps in years of
real financial exigency. For all its drawbacks, an inflation-linked formula may
be necessary to combat the powerful incentives that tend to deploy limited
resources to increase the number of clients served, often at the expense of the
adequacy of grants provided.
In addition, policymakers should study closely the logic of providing
some cost allowance for administration of the complex Cal Grant programs
within the context of a broader investigation into the merits of further
expanding financial aid administrative and outreach capacity in the
community college system. Support for these purposes is still far below that
of the other public segments (Figure 3).
Fee Policy and System Improvements
• Provide budgetary incentives to CCC’s for moderate fee increases
• Use revenue to improve services (fee revenue) and aid (state matching
dollars)
• Link future fee increases to state personal income
Community college fees in California have tended to jump during
recessions, when students can least afford it. These increases have then been
followed by long periods when fees are flat, or even rollbacks when the state
has resources (at least initially) to replace the lost revenue. It seems clear
that there is a powerful force perpetuating the inertia in thinking about CCC
fees—the natural advocates for needed fee increases within the system see
no benefit because of the state’s history of offsetting fee increase revenues
with Proposition 98 funding reductions (usually in times of state budgetary
stringency).
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California Community Colleges
Instead of cutting fees in times when state resources are available, as is
now the standard response, policymakers should seek to break away from the
limitations of current thinking by offering positive budgetary incentives—for
example, matching revenue from the increases with new state funds—for
the system to increase fee revenue in a measured way for agreed purposes.
Increasing fee revenue is possible within the Proposition 98 mechanism if
policymakers choose to allocate additional state resources. If the new money
were spent wisely and with strong performance accountability mechanisms,
the state could expand needy students’ access to financial aid, and enhance
programs and services targeted to increasing student retention and success.
This matching approach could shift the incentives around fee increases by
allowing both the CCC system and state policymakers to see maximum
impact from the difficult step they took in raising fees.
In our view, the additional fee revenue should pay for improved services
directed at improving persistence, degree or certificate completion, and
transfer rates while the state funds should pay for financial aid capacity
building and increased need-based aid. Thus students who do pay fees, who
in general are not a particularly affluent group, would be paying for higher
quality services, not for aid to someone else.
The additional resources for need-based aid should permit the creation of
a modest community college grant program analogous to those developed by
the UC and CSU systems. This new program could be specifically designed
to address the unique problems of community college students by helping
fill the gaps that existing aid programs leave relative to their needs. An effort
to build financial aid capacity within the colleges would need to accompany
such a program, given that many colleges are probably not prepared to
operate an aid program of their own (as opposed to simply administering
federal programs and Cal Grants).
Fee increases should be modest but steady, perhaps linked to annual
growth in the state’s median personal income, which serves as a rough
measure of affordability for both fee-paying students and the state providing
the matching funds. We calculate that, if state per capita personal income
increased at an average annual rate of 4.36% over the next ten years (2006 to
2015), as it did over the last ten, fees would increase by only around $1 per
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California Community Colleges
credit per year on average61 (less at the beginning, slightly more than this
toward the end of the period due to the effect of compounding), reaching
$29.37 in 2015–2016. Appendix B includes projections of the additional
revenue that this would bring to the CCC system through both new fee
revenue and state matching funds. Fee waivers should continue to be
available to the demonstrably needy and, as has been emphasized, efforts
to publicize these and other financial aid sources should be enhanced. For
those who do not qualify for fee waivers, schools should routinely provide
information about how to claim federal tax credits for fees paid.
The overarching idea here is both to smooth the path of fees that now
fluctuate dramatically and, most importantly, to provide a vehicle to bring
new resources into a system that badly needs them in order to cope more
successfully with the great challenges it faces. The matching mechanism
seems a logical approach for shifting the stubborn but largely self-defeating
positions the key stakeholders now hold about fees. Still, if a broad fee
increase for the important purposes described is regarded as beyond the
pale, an alternative might be to selectively impose higher fees only on
students taking courses with less priority for state subsidy, such as those not
transferable or on the path to a degree or recognized certificate.
California’s educational and economic future depends heavily on the
California Community College system. The state needs the system to produce
broad access to higher education, and beyond that, quality results for
many more of those who enter through its open door. Key policy levers for
achieving these goals are more need-based aid and increased capacity to help
students access the system, more resources for programs and services targeted
at student success, and, crucially, more accountability for results throughout
the system. Moderate, predictable fee increases matched by additional state
appropriations could generate significant new resources for these purposes.
To be sure, assumptions and incentives would need to be restructured to
better support this agenda. But this is a fitting task for what must be visionary
policy leadership as the state faces rapid economic and demographic change
in a most challenging competitive context.
61
There is substantial variation, of course, in annual growth in state per capita
personal income. To make such fluctuations more manageable for students, colleges,
and the state, perhaps annual changes in fees and state matching funds could be
limited in range, or be linked to a moving average of historical rates.
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California Community Colleges
APPENDIX A
TEXTBOOK COSTS AND STRATEGIES TO CONTAIN THEM
Textbook costs are a significant expense in the budgets of California
community college students, equaling or exceeding fees for many of them.
Textbook prices have increased rapidly over the past several years, prompting
investigations into industry practices and spurring discussion at many levels
about how best to contain costs.
In 2005, the United States Government Accountability Office (GAO) found
that textbook prices have increased at roughly twice the rate of inflation (i.e.,
at 6% per year between 1987 and 2004) and that these increases were most
directly related to the common publisher practice of bundling textbooks with
supplemental materials, such as CD-ROMs or workbooks (USGAO 2005).
Furthermore, the GAO found that publishers are unlikely to stop packaging
these materials with textbooks because of the perceived increased demand for
advanced technology. Whether the demand for such supplemental materials
exists outside of that which the publishers create in order to realize more
revenue is not clear: A 2004 report from the California Public Interest Research
Group (CALPIRG) found that 65% of faculty surveyed at the University of
California rarely, if ever, use supplemental materials bundled with required
textbooks (CALPIRG 2004). Both the CALPIRG and GAO reports also pointed
out that publishers are issuing revised editions of textbooks more frequently,
which drives up costs by forcing students to buy new books rather than used.
Meanwhile publishers argue that they provide low-cost alternatives to
expensive textbooks, including black-and-white or abbreviated editions and,
more recently, electronic and Web-based books (AAP 2006), and that faculty
are free to choose such options.
Despite a number of attempts in California to affect textbook prices
through legislation, only one proposal has been signed into law. AB 2477
(Liu 2004)62 encourages publishers to limit bundling and be transparent
about prices, availability, and revision schedules, and encourages faculty to
62
California Assembly Bill AB 2477, Liu, Caroline, et. al. (September 16, 2004)
Postsecondary Education: Production and Pricing of College Textbooks. http://leginfo.
ca.gov/pub/03-04/bill/asm/ab_2451-2500/ab_2477_bill_20040916_chaptered.html
53
California Community Colleges
be similarly open with students and bookstores about their textbook choices
and to consider the cost to students when choosing textbooks. Bookstores
are required to work with academic senates, publishers, and faculty to
foster procedures that promote cost savings for students. The bill also urges
colleges to establish and encourage used book and rental programs. While
such measures may hold promise for reducing costs, few of them offer real
incentives to buttress their encouragement of specific practices, or teeth to
increase compliance.
On the national level, the congressional Advisory Committee on
Student Financial Assistance is working to develop federal and other
recommendations for controlling textbook costs. Since constitutional concerns
limit states’ abilities to regulate national publishers’ practices, federal action
may be required to even consider potential cost-lowering strategies directed
at them. For faculty preferring standard textbooks, however, there is little that
institutions or states can do to discourage the bundling of these textbooks
with supplements due to the primacy of federal interstate commerce laws.
Although little progress has been made in reducing student textbook costs
on a widespread scale, individual colleges have implemented a number of
different programs aimed at this issue. Several such programs are described
below.
Used book sales help students in two ways. First, they enable students
to purchase required textbooks at prices below retail cost, and, second, they
often allow students to sell their previously used textbooks back to bookstores
to recoup some of their initial expense.
The overhead costs associated with used book sales are higher because of
the staffing needed for buy-backs and to ensure adequate used book supplies.
In the event that used book sales become too pervasive, publishers could
further shorten the time between revisions to encourage more new book
purchases. There are concerns and some evidence that this may already be
occurring (Community College League of California 2004).
Book rental programs have garnered attention recently, and CALPIRG
has released a guide for institutions that want to establish one (CALPIRG
2005). Book rental programs are likely the least expensive solution for
students—students typically pay usage fees each semester they participate in
rental programs, as well as per-book fees. However, such programs present
significant administrative challenges, including the sizable startup costs
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California Community Colleges
involved, the significant storage space needed to accommodate rental books,
and the staff time spent tracking late and unreturned books. Moreover, faculty
have generally been less than enthusiastic about these programs, which
typically require them to commit to using a particular text for several years,
thereby limiting their freedom of choice.
Rental programs have shown varying levels of success in the California
Community College system. Taft College’s program enjoys strong faculty
support and encompasses approximately 80% of the campus’s required books.
On the other hand, Los Angeles Pierce College’s program lasted only one
semester after few rented books were returned (Community College League
of California 2004).
Short-term loans for book purchases and book payment plans do not
reduce the costs of student textbooks, but they can help make the costs more
manageable by spreading them out over weeks or months. We are not aware
of any large-scale programs of this type within the CCC system.
Book grants help students on a few campuses, and are often run through
student services programs, such as Extended Opportunity Programs and
Services (EOPS). Despite the potential these grants offer, funding does not
exist to implement them on a system-wide basis. CCC student need certainly
justifies a statewide program, and successful campus-based programs might
serve as good models.
Open content course materials offer a great deal of potential for student
savings. The CCC Foothill-DeAnza District’s Sofia project, for example,
recently published materials for eight courses on the project’s Web site
(http://sofia.fhda.edu/index.htm). Such programs encourage the free
distribution of college course materials to enable college-level learning
for all. While Sofia project course materials may potentially save CCC
students hundreds of dollars per course, they are currently designed as
course supplements rather than textbook replacements. We are unaware
of any research on the actual usage of these or other open content course
materials within CCC courses. Further study is needed that inquires into
this and all other models, particularly those that hold promise for largescale implementation or that have resulted in demonstrated cost savings for
students.
Another option for reducing textbook costs is to enlist the help of college
faculty, the true customers of academic publishers. By communicating with
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California Community Colleges
bookstores, faculty can learn the costs associated with various textbook
options and choose accordingly. Making textbook selections well ahead
of the beginning of an academic term helps lower book costs by enabling
booksellers to create a substantial used book market through purchases from
wholesalers or other outside sources. Choosing to use a book for multiple
terms helps booksellers create more of an internal used book market through
buy-backs. Education of faculty is also key: Faculty should choose bundled
materials only when necessary and be informed about the challenges of
returns and buy-backs for such bundles.
For the time being, however, given concerns related to constitutionality,
academic freedom, and administrative realities, bringing the issue of high
textbook costs to the attention of faculty, publishers, legislators, and students
may be the only way to alter the current trajectory of textbook expenses.
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California Community Colleges
APPENDIX B
ROUGH COST PROJECTIONS FOR CAL GRANT AND FEE MATCHING FUNDS
POLICY RECOMMENDATIONS
Here we offer very preliminary cost projections designed to provide a rough
estimate of the costs our recommendations on the above topics might entail.
Ia. Cal Grant Access Grant Cost Projections and Methodology
The majority of Cal Grant dollars going to California community college
students come from the access grant portion of Cal Grant B awards. These
access grants are distributed through Cal Grant Entitlement awards and Cal
Grant Competitive awards, two categories of programs created under the Cal
Grant B umbrella in 2001–2002. Recent high school graduates are eligible for
Entitlement awards, whereas older students are eligible for a statutorily set
number of Competitive awards.
We project here only the cost of the access grant portion of the Entitlement
and Competitive Cal Grant B awards. Projections of the state costs under
the two programs are determined separately, as described below. Projections
are based on Cal Grant B access grant awards and expenditures for the five
academic years since program changes were implemented in 2001–2002.
The access grant currently stands at $1,551. With no changes in access
grant award amounts, we estimate that these costs will reach $209 million in
2015–2016 as enrollments grow. To reach an amount equal to the access grant’s
original value as set by the Legislature in 1969–1970, the maximum award
would need to be increased to $6,727 by 2015–2016. We project costs under
this scenario would reach $905 million in that year. 63 While any increase in
63 For the projections described in this section, costs would be higher if the larger
awards stimulated higher attendance rates (and thus more Entitlement awards) or
higher persistence rates (and thus more renewal awards). We assume here no increase
in the number of Competitive awards, because this number has been flat for several
years.
57
the access grant award would represent desirable progress, in light of the
state’s financial circumstances, we recommend that the individual award be
increased to a substantial percentage of the originally legislated grant value
rather than to 100% of it. We estimate that reaching a target of 75% of the
access grant award’s original value over ten years would cost about $679
million in 2015–2016, compared with $209 million if the award amount were
not increased at all.64 To reach a target of 50% of the original award value over
this same ten-year period would cost about $453 million in 2015–2016.
Ib. Cal Grant Access Grant Cost Projection Methodology
Step 1: Estimating the number of new Entitlement awards.
We compared the number of Cal Grant B Entitlement awards for the first five
years of data with the number of high school graduates in California in those
years. As the ratio of awards to graduates grows slightly each year, we used
a three-year average of annual growth in this ratio to project shares of high
school graduates who will receive these grants in future years. Under this
scenario, the projected share would grow from 9.72% in 2005–2006 to 11.96%
in 2015–2016. We then applied each year’s share to the projected number of
high school graduates in that year (as projected by the National Center for
Education Statistics) to determine the projected number of new Entitlement
awards.
Step 2: Estimating the number of new Competitive awards.
Because the number of Cal Grant Competitive award offers is set by statute,
we used a three-year average of the number of Cal Grant B awards actually
paid out.
Step 3: Estimating renewal rates for Entitlement and Competitive awards.
Students receiving Cal Grant B awards can renew them for up to three years
(for a total of four years of eligibility), assuming continued financial need and
enrollment in an eligible institution. To estimate renewal rates, we compared
the number of new grants in a given year with the total number of new and
renewal grants. Since the grant programs were initiated in 2001–2002, there
have only been two years at theoretical full capacity, 2004–2005 and 2005–
2006. We therefore calculated a two-year (2004–2005 and 2005–2006) average
64
We assume here that access grant awards would be increased for students in all
higher education segments.
California Community Colleges
(new grant):(total grant) ratio for both Entitlement and Competitive awards
and used this to project forward.
Step 4: Estimating the average dollar value of an individual Cal Grant B award.
Although the maximum award available to students under the access grant
portion of Cal Grant B is $1,551, part-time student awards and some renewal
awards may have a smaller value. To estimate the average award size, we
calculated a ratio of (average grant size):(maximum grant size). Again, we used
a two-year average for the years 2004–2005 and 2005–2006.
Step 5: Estimating the number of paid Cal Grant B awards.
We estimated total Entitlement awards using the number of new Entitlement
awards (Step 1 above) and applying the Entitlement award renewal rate (Step
3 above). We estimated total Competitive awards using the number of new
Competitive awards (Step 2 above) and applying the Competitive award
renewal rate (Step 3 above). We added these two figures together for total
estimated Cal Grant B awards paid out.
Step 6: Estimating increases in the California Consumer Price Index.
If the original $900 access grant award had kept pace with inflation since 1969–
1970, the maximum award level would have been $5,190 in 2006–2007, using
historical California Consumer Price Index (CCPI) data. To project what the
maximum award level would be in 2015–2016 if it kept pace with inflation, we
took an average of the last ten annual increases in the CCPI and projected that
annual rate forward to 2015–2016.
Step 7: Estimating total Cal Grant B access grant cost in 2015–2016.
For Entitlement and Competitive awards separately, we multiplied the
projected number of grants (Step 5 above) by the maximum award level
(currently $1,551, which we used as the base for the future projections), by
the average grant amount (from Step 3). The total estimated cost of Cal Grant
B access grant expenditures is the total of the Entitlement and Competitive
awards as determined using these formulas. For alternative scenarios, we used
the same formula and substituted alternative maximum grant levels.
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II. Fee Revenue Projections and Methodology
Using historical CCC system-wide fee revenue data from the California
Postsecondary Education Commission and CCC enrollment projections
from the California Demographic Research Unit, we projected increased fee
revenues to 2015–2016 and the amount to be matched by the state under our
recommendations discussed earlier (see pages 50–52). We estimated growth in
annual per capita personal income over the years 2005–2006 to 2015–2016 by
assuming it would be the same as the average annual growth rate during the
past ten years. This rate is 4.36% per year. For each future year, we multiplied
the previous year’s fee revenue by this estimated growth rate in per capita
personal income, and then by projected enrollment growth.
Under these assumptions, in the first year, fee revenues (net of waivers)
would increase by an estimated $21 million (7%) in the first year, plus $21
million from the state match, to generate about $42 million in new revenue to
the CCC system. This increment would recur, and generally grow modestly,
each year. 65
In 2015–2016, per-credit fees would reach $29.37, and we project $31
million in new fee revenue for the state to match.
65
State matching of fee increase revenues need not be limited to a dollar-for-dollar
basis. There are many possibilities. We assume that the state would also continue to
replace lost fee revenue in the CCC budget as it does now. Also, the higher fees are
not assumed to depress enrollments from forecast levels, because financial aid is also
assumed to increase under our other recommendations. Again, these figures should
be regarded as only very preliminary ballpark estimates. Projections of fee revenues
are based on the California Postsecondary Education Commission’s Fiscal Profiles
2006, Display 34, and enrollment projections are from the California Department of
Finance California Public Postsecondary Enrollment Projections, 2006 Series.
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ABOUT THE AUTHORS
William Zumeta is a senior fellow at The National Center for Public Policy
and Higher Education, where he spent a sabbatical year in 2005–2006. He
is a professor at the Daniel J. Evans School of Public Affairs and the College
of Education at the University of Washington-Seattle. He has also served
as associate dean and acting dean of the Evans School. Zumeta holds a
master’s in public policy and a Ph.D. from the Goldman School of Public
Policy at UC Berkeley and previously taught at the University of British
Columbia and UCLA. His research focuses on public policies toward higher
education, including finance and accountability policies, that affect the entire
range of public and private academic institutions, from community colleges
through graduate education-intensive research universities. A wide range
of foundations, national associations, and state and federal agencies have
supported his work.
Deborah Frankle is a research analyst with The Institute for College Access
and Success (TICAS). Her background includes work in policy analysis,
research, labor, and social services. As a policy analyst at The National Center
for Public Policy and Higher Education, Frankle’s work focused primarily
on community college affordability and finance policy issues. Prior to this,
she worked as a researcher with labor unions. Her other experience includes
direct service and management roles within a variety of nonprofit settings.
She holds a master’s in social work with a focus on social policy from San
Francisco State University and a bachelor’s degree from the University of
Michigan.
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Acknowledgements
The authors are pleased to acknowledge financial support for this research
from the Education Program at The William and Flora Hewlett Foundation
and Program Officer Pamela Burdman for valuable help and encouragement.
We also thank Patrick Callan, President, and Joni Finney, Vice President,
of The National Center for Public Policy and Higher Education, for moral
support and for providing an appropriate and most pleasant venue for the
conduct of this project. Lutz Berkner and associates at MPR Inc. of Berkeley,
California, provided us valuable expert assistance in working with data from
the National Postsecondary Student Aid Survey (NPSAS). Dennis Jones of the
National Center for Higher Education Management Systems reviewed cost
projections on the recommended policy changes provided in the report (see
Appendix B). We wish to emphasize, however, that no one but the authors
bears any responsibility for the results.
Our thanks and the above caveat also apply to many others in the
California Community Colleges and its Chancellor’s Office, notably Patrick
Perry, Tim Bonnel, Linda Michalowski, and Myrna Huffman, who were
very helpful; Steve Boilard and Jennifer Kuhn of the California Legislative
Analyst’s Office, who provided valuable information and raised good
questions; Mary Gill of the House Higher Education Committee staff; Kevin
Woolfork of the California Postsecondary Education Commission; Abdi
Soltani of the Campaign for College Opportunity; and university-based
researchers, notably Professor Nancy Shulock of the Institute for Higher
Education Leadership and Policy at California State University, Sacramento,
and Professor Patrick Murphy of the University of San Francisco and the
Public Policy Institute of California, whose earlier work provided helpful
perspective.
We would also like to acknowledge the following people, all of whom
provided helpful commentary and suggestions during the course of our work:
Professor Thomas Bailey, Community College Research Center, Columbia
University; Dean David Breneman, University of Virginia; Kathleen Chavira,
Senate Education Committee; Marcia Cosgrove, Campaign for College
Opportunity; Marlene Garcia, Senate Office of Research; Bruce Hamlett,
Assembly Higher Education Committee; Gerald Hayward, Management
Analysis and Planning Inc.; Willard Hom, California Community Colleges
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California Community Colleges
Chancellor’s Office; Michelle Mulkey, Fenton Communications; Jason
Murphy, Senate Higher Education Committee; Robert Shireman, The Institute
for College Access and Success; Eric Skinner, Office of the California Secretary
of Education; and David Wolf, Campaign for College Opportunity.
This is far from a complete list of those who assisted us with information,
historical and policy perspective, relevant prior publications and studies, and
insights of many types in addition to their time. To all, we are grateful.
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THE NATIONAL CENTER FOR PUBLIC POLICY AND HIGHER EDUCATION
The National Center for Public Policy and Higher Education promotes public
policies that enhance Americans’ opportunities to pursue and achieve highquality education and training beyond high school. As an independent,
nonprofit, nonpartisan organization, the National Center prepares actionoriented analyses of pressing policy issues facing the states and the nation
regarding opportunity and achievement in higher education—including
two- and four-year, public and private, for-profit and nonprofit institutions.
The National Center communicates performance results and key findings to
the public, to civic, business, and higher education leaders, and to state and
federal leaders who are in positions to improve higher education policy.
Established in 1998, the National Center is not affiliated with any
institution of higher education, with any political party, or with any
government agency; it receives continuing, core financial support from a
consortium of national foundations that includes The Pew Charitable Trusts,
The Atlantic Philanthropies, and The Ford Foundation.
152 North Third Street, Suite 705, San Jose, California 95112
Telephone: 408-271-2699 • FAX: 408-271-2697
www.highereducation.org
NATIONAL CENTER PUBLICATIONS
The National Center publishes:
• Reports and analyses commissioned by the National Center,
• Reports and analyses written by National Center staff,
• National Center Policy Reports that are approved by the National Center’s
Board of Directors, and
• National CrossTalk, a quarterly publication.
The following National Center publications—as well as a host of other information
and links—are available at www.highereducation.org. Single copies of most of these
reports are also available from the National Center. Please FAX requests to 408-2712697 and ask for the report by publication number.
California Community Colleges: Making Them Stronger and More Affordable, by
William Zumeta and Deborah Frankle (March 2007, #07-1). This report examines the
effectiveness of statewide policies in assisting the California Community Colleges
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California Community Colleges
in meeting their mandate for affordability, and makes recommendations in light of
today’s public needs.
Measuring Up Internationally: Developing Skills and Knowledge for the Global
Knowledge Economy, by Alan Wagner (September 2006, #06-7). In comparing
the performance of the United States in higher education with that of advanced,
market-economy countries across the globe, this report finds that the United States’
leadership position has eroded.
Measuring Up 2006: The National Report Card on Higher Education (September
2006). Measuring Up 2006 consists of a national report card for higher education
(report #06-5) and 50 state report cards (#06-4). The purpose of Measuring Up
2006 is to provide the public and policymakers with information to assess and
improve postsecondary education in each state. For the first time, this edition
offers international comparisons with states and the nation as a whole. Visit
www.highereducation.org to download Measuring Up 2006 or to make your own
comparisons of state performance in higher education.
Technical Guide for Measuring Up 2006: Documenting Methodology, Indicators,
and Data Sources (September 2006, #06-6).
Checks and Balances at Work: The Restructuring of Virginia’s Public Higher
Education System, by Lara K. Couturier (June 2006, #06-3). This case study of
Virginia’s 2005 Restructured Higher Education Financial and Administrative
Operations Act examines the restructured relationship between the commonwealth
and its public colleges and universities. The act gives more autonomy to the public
colleges but checks it with new accountability targeted directly to the needs of the
state.
American Higher Education: How Does It Measure Up for the 21st Century? by James
B. Hunt Jr. and Thomas J. Tierney with a foreword by Garrey Carruthers (May 2006,
#06-2). These essays by former Governor James B. Hunt Jr. and business leader
Thomas J. Tierney lay out in succinct fashion the requirements of both our nation
and our states for new and higher levels of performance from America’s colleges and
universities.
Claiming Common Ground: State Policymaking for Improving College Readiness
and Success, by Patrick M. Callan, Joni E. Finney, Michael W. Kirst, Michael D.
Usdan, and Andrea Venezia (March 2006, #06-1). To improve college readiness and
success, states can develop policies that better connect their
K–12 and postsecondary education systems. However, state action in each of the
following policy areas is needed to create college-readiness reform: alignment
of coursework and assessments; state finance; statewide data systems; and
accountability.
Measuring Up on College-Level Learning, by Margaret A. Miller and Peter T. Ewell
(October 2005, #05-8). In this report, the National Forum on College-Level Learning
proposes a model for evaluating and comparing college-level learning on a state-by-
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state basis, including assessing educational capital. As well as releasing the results for
five participating states, the authors also explore the implications of their findings in
terms of performance gaps by race/ethnicity and educating future teachers.
The Governance Divide: A Report on a Four-State Study on Improving College
Readiness and Success, by Andrea Venezia, Patrick M. Callan, Joni E. Finney, Michael
W. Kirst, and Michael D. Usdan (September 2005, #05-3). This report, supported by
case studies in Florida, Georgia, New York, and Oregon, identifies and examines
policy options available to states that are interested in creating sustained K–16
reform.
The Governance Divide: The Case Study for Florida, by Andrea Venezia and Joni
E. Finney (2006, #05-4).
The Governance Divide: The Case Study for Georgia, by Andrea Venezia, Patrick
M. Callan, Michael W. Kirst, and Michael D. Usdan (2006, #05-5).
The Governance Divide: The Case Study for New York, by Andrea Venezia,
Michael W. Kirst, and Michael D. Usdan (2006, #05-6).
The Governance Divide: The Case Study for Oregon, by Andrea Venezia and
Michael W. Kirst (2006, #05-7).
Borrowers Who Drop Out: A Neglected Aspect of the College Student Loan Trend,
by Lawrence Gladieux and Laura Perna (May 2005, #05-2). This report examines the
experiences of students who borrow to finance their educations, but do not complete
their postsecondary programs. Using the latest comprehensive data, this report
compares borrowers who drop out with other groups of students, and provides
recommendations on policies and programs that would better prepare, support, and
guide students—especially low-income students—in completing their degrees.
Case Study of Utah Higher Education, by Kathy Reeves Bracco and Mario Martinez
(April 2005, #05-1). This report examines state policies and performance in the areas
of enrollment and affordability. Compared with other states, Utah has been able to
maintain a system of higher education that is more affordable for students, while
enrollments have almost doubled over the past 20 years.
Measuring Up 2004: The National Report Card on Higher Education (September
2004). Measuring Up 2004 consists of a national report card for higher education
(report #04-5) and 50 state report cards (#04-4). The purpose of Measuring Up
2004 is to provide the public and policymakers with information to assess and
improve postsecondary education in each state. For the first time, this edition
provides information about each state’s improvement over the past decade. Visit
www.highereducation.org to download Measuring Up 2004 or to make your own
comparisons of state performance in higher education.
Technical Guide Documenting Methodology, Indicators, and Data Sources for
Measuring Up 2004 (November 2004, #04-6).
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Ensuring Access with Quality to California’s Community Colleges, by Gerald
C. Hayward, Dennis P. Jones, Aims C. McGuinness, Jr., and Allene Timar, with a
postscript by Nancy Shulock (May 2004, #04-3). This report finds that enrollment
growth pressures, fee increases, and recent budget cuts in the California Community
Colleges are having significant detrimental effects on student access and program
quality. The report also provides recommendations for creating improvements that
build from the state policy context and from existing promising practices within the
community colleges.
Public Attitudes on Higher Education: A Trend Analysis, 1993 to 2003, by John
Immerwahr (February 2004, #04-2). This public opinion survey, prepared by Public
Agenda for the National Center, reveals that public attitudes about the importance
of higher education have remained stable during the recent economic downturn.
The survey also finds that there are some growing public concerns about the costs of
higher education, especially for those groups most affected, including parents of high
school students, African-Americans, and Hispanics.
Responding to the Crisis in College Opportunity (January 2004, #04-1). This policy
statement, developed by education policy experts at Lansdowne, Virginia, proposes
short-term emergency measures and long-term priorities for governors and
legislators to consider for funding higher education during the current lean budget
years. Responding to the Crisis suggests that in 2004 the highest priority for state
higher education budgets should be to protect college access and affordability for
students and families.
With Diploma in Hand: Hispanic High School Seniors Talk About Their Future,
by John Immerwahr (June 2003, #03-2). This report by Public Agenda explores
some of the primary obstacles that many Hispanic students face in seeking higher
education—barriers that suggest opportunities for creative public policy to improve
college attendance and completion rates among Hispanics.
Purposes, Policies, Performance: Higher Education and the Fulfillment of a State’s
Public Agenda (February 2003, #03-1). This essay is drawn from discussions of higher
education leaders and policy officials at a roundtable convened in June 2002 at New
Jersey City University on the relationship between public purposes, policies, and
performance of American higher education.
Measuring Up 2002: The State-by-State Report Card for Higher Education (October
2002, #02-7). This report card, which updates the inaugural edition released in 2000,
grades each state on its performance in five key areas of higher education. Measuring
Up 2002 also evaluates each state’s progress in relation to its own results from 2000.
Technical Guide Documenting Methodology, Indicators, and Data Sources for
Measuring Up 2002 (October 2002, #02-8).
State Policy and Community College–Baccalaureate Transfer, by Jane V. Wellman
(July 2002, #02-6). This report recommends state policies to energize and improve
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higher education performance regarding transfers from community colleges to fouryear institutions.
Fund for the Improvement of Postsecondary Education: The Early Years (June 2002,
#02-5). The Fund for the Improvement of Postsecondary Education (FIPSE) attained
remarkable success in funding innovative and enduring projects during its early
years. This report, prepared by FIPSE’s early program officers, describes how those
results were achieved.
Losing Ground: A National Status Report on the Affordability of American Higher
Education (May 2002, #02-3). This national status report documents the declining
affordability of higher education for American families, and highlights public policies
that support affordable higher education. It provides state-by-state summaries as
well as national findings.
The Affordability of Higher Education: A Review of Recent Survey Research,
by John Immerwahr (May 2002, #02-4). This review of recent surveys by Public
Agenda confirms that Americans feel that rising college costs threaten to make
higher education inaccessible for many people.
Coping with Recession: Public Policy, Economic Downturns, and Higher Education,
by Patrick M. Callan (February 2002, #02-2). This report outlines the major policy
considerations that states and institutions of higher education face during economic
downturns.
Competition and Collaboration in California Higher Education, by Kathy Reeves
Bracco and Patrick M. Callan (January 2002, #02-1). This report argues that the
structure of California’s state higher education system limits the system’s capacity for
collaboration.
Measuring Up 2000: The State-by-State Report Card for Higher Education
(November 2000, #00-3). This first-of-its-kind report card grades each state on its
performance in higher education. The report card also provides comprehensive
profiles of each state and brief states-at-a-glance comparisons.
Beneath the Surface: A Statistical Analysis of the Major Variables Associated
with State Grades in Measuring Up 2000, by Alisa F. Cunningham and Jane V.
Wellman (November 2001, #01-4). Using statistical analysis, this report explores
the “drivers” that predict overall performance in Measuring Up 2000.
Supplementary Analysis for Measuring Up 2000: An Exploratory Report,
by Mario Martinez (November 2001, #01-3). This supplement explores the
relationships within and among the performance categories in Measuring Up
2000.
Some Next Steps for States: A Follow-up to Measuring Up 2000, by Dennis Jones
and Karen Paulson (June 2001, #01-2). This report suggests a range of actions
that states can take to bridge the gap between state performance identified
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California Community Colleges
in Measuring Up 2000 and the formulation of effective policy to improve
performance in higher education.
A Review of Tests Performed on the Data in Measuring Up 2000, by Peter
Ewell (June 2001, #01-1). This review describes the statistical testing performed
on the data in Measuring Up 2000 by the National Center for Higher Education
Management Systems.
Recent State Policy Initiatives in Education: A Supplement to Measuring Up
2000, by Aims C. McGuinness, Jr. (December 2000, #00-6). This supplement
highlights education initiatives that states have adopted since 1997–98.
Assessing Student Learning Outcomes: A Supplement to Measuring Up 2000,
by Peter Ewell and Paula Ries (December 2000, #00-5). This report is a national
survey of state efforts to assess student learning outcomes in higher education.
Technical Guide Documenting Methodology, Indicators and Data Sources for
Measuring Up 2000 (November 2000, #00-4).
A State-by-State Report Card on Higher Education: Prospectus (March 2000,
#00-1). This document summarizes the goals of the National Center’s report-card
project.
Great Expectations: How the Public and Parents—White, African-American, and
Hispanic—View Higher Education, by John Immerwahr with Tony Foleno (May
2000, #00-2). This report by Public Agenda finds that Americans overwhelmingly
see higher education as essential for success. Survey results are also available for the
following states:
Great Expectations: How Pennsylvanians View Higher Education (May 2000, #00-2b).
Great Expectations: How Floridians View Higher Education (August 2000, #00-2c).
Great Expectations: How Coloradans View Higher Education (August 2000, #00-2d).
Great Expectations: How Californians View Higher Education (August 2000, #00-2e).
Great Expectations: How New Yorkers View Higher Education (October 2000, #00-2f).
Great Expectations: How Illinois Residents View Higher Education (October 2000, #002h).
State Spending for Higher Education in the Next Decade: The Battle to Sustain
Current Support, by Harold A. Hovey (July 1999, #99-3). This fiscal forecast of state
and local spending patterns finds that the vast majority of states will face significant
fiscal deficits over the next eight years, which will in turn lead to increased scrutiny
of higher education in almost all states, and to curtailed spending for public higher
education in many states.
South Dakota: Developing Policy-Driven Change in Higher Education, by Mario
Martinez (June 1999, #99-2). This report describes the processes for change in higher
education that government, business, and higher education leaders are creating and
implementing in South Dakota.
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Taking Responsibility: Leaders’ Expectations of Higher Education, by John
Immerwahr (January 1999, #99-1). This paper reports the views of those most
involved with decisionmaking about higher education, based on focus groups and a
survey conducted by Public Agenda.
The Challenges and Opportunities Facing Higher Education: An Agenda for Policy
Research, by Dennis Jones, Peter Ewell, and Aims McGuinness, Jr. (December
1998, #98-8). This report argues that due to substantial changes in the landscape of
postsecondary education, new state-level policy frameworks must be developed and
implemented.
Higher Education Governance: Balancing Institutional and Market Influences,
by Richard C. Richardson, Jr., Kathy Reeves Bracco, Patrick M. Callan, and Joni
E. Finney (November 1998, #98-7). This publication describes the structural
relationships that affect institutional effectiveness in higher education, and argues
that state policy should strive for a balance between institutional and market forces.
Federal Tuition Tax Credits and State Higher Education Policy: A Guide for State
Policy Makers, by Kristin D. Conklin (December 1998, #98-6). This report examines
the implications of the federal income tax provisions for students and their families,
and makes recommendations for state higher education policy.
The Challenges Facing California Higher Education: A Memorandum to the Next
Governor of California, by David W. Breneman (September 1998, #98-5). This
memorandum argues that California should develop a new Master Plan for Higher
Education.
Tidal Wave II Revisited: A Review of Earlier Enrollment Projections for California
Higher Education, by Gerald C. Hayward, David W. Breneman, and Leobardo F.
Estrada (September 1998, #98-4). This review finds that earlier forecasts of a surge in
higher education enrollments were accurate.
Organizing for Learning: The View from the Governor’s Office, by James B. Hunt
Jr., chair of the National Center for Public Policy and Higher Education, and former
governor of North Carolina (June 1998, #98-3). This publication is an address to
the American Association for Higher Education concerning opportunity in higher
education.
The Price of Admission: The Growing Importance of Higher Education, by John
Immerwahr (Spring 1998, #98-2). This report is a national survey of Americans’ views
on higher education, conducted and reported by Public Agenda.
Concept Paper: A National Center to Address Higher Education Policy, by Patrick M.
Callan (March 1998, #98-1). This concept paper describes the purposes of the National
Center for Public Policy and Higher Education.
www.highereducation.org
74
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