Insights & News

New College Futures Report: Higher Education Capacity Crisis Threatens California Economy, Widens Equity Gaps

By 2030, about 144,000 college-ready students are expected to be turned away annually from four-year colleges and universities – nearly double the number kept away during the 2018-2019 academic year. The capacity crisis poses a serious threat to the state’s economy and will exacerbate already deep racial, income, and geographic inequities.

In this report from College Futures Foundation, Making Room for Success: Addressing Capacity Shortfalls at California’s Universities, details the state’s capacity challenges and recommends solutions. The report is based on an analysis commissioned by College Futures and conducted by McKinsey & Company that examined capacity in the California Community Colleges, the University of California (UC), the California State University (CSU), and private California colleges and universities.

In recent years, California has made significant gains in student preparation and success in K-12 schools and community colleges. More students are graduating from high school than ever before, and more of them have completed college preparatory classes. In addition, growing numbers of community college students are earning the credits needed to transfer and continue their education at a four-year institution.

If the state doesn’t lean into and extend those successes, the capacity crisis means that many of those students will be unable to continue their education and earn a bachelor’s degree.

“These capacity shortfalls are simply unacceptable,” said Monica Lozano, President and CEO of College Futures Foundation. “By failing to address this issue, California is squandering hard-won gains that have ensured more of our students are prepared for, qualified for, and interested in pursuing a college education.”

Data shows that the capacity crisis could cripple the state’s economic potential:

  • By 2030, California is projected to have a shortfall of nearly 1.1 million workers with a bachelor’s degree.
  • Estimates of future job openings suggest that nearly twice as many bachelor’s degrees will be required in California relative to associate degrees (or those with some college) by 2030 as the economy continues to demand more technical, creative, and critical thinking skills.
  • California already is unable to produce enough degree holders in high-demand fields. Throughout the UC and CSU systems, nursing, engineering, and computer science programs commonly have far more eligible applicants than space.

The crisis is particularly acute for students from low-income families and communities of color. The state’s ability to increase economic mobility will be hindered as students are forced to either take on additional expenses and move away from their regional support systems to obtain a college degree or enter the workforce without a degree.

The report details capacity gaps and labor shortages in three regions with large proportions of low-income families and communities of color: the Central Valley, Inland Empire, and Los Angeles. By 2030:

  • The Central Valley will face an annual capacity gap of 14,000 seats for four-year degrees—turning away nearly half of the qualified students seeking those degrees in the region—while at the same time facing a labor market gap of 33,000 workers holding bachelor’s degrees.
  • The Inland Empire will face an annual capacity gap of 20,000 seats for four-year degrees—turning away more than half of the qualified students seeking those degrees in the region—while at the same time facing a labor market gap of 61,000 workers holding bachelor’s degrees.
  • Los Angeles will face an annual capacity gap of 16,000 seats for four-year degrees–turning away 16 percent of its eligible student population—even as it faces one of the state’s largest labor needs, 261,000 additional workers with bachelor’s degrees.

To address California’s higher education capacity crisis, the report recommends the following key solutions:

  • IMPROVED STUDENT EXPERIENCE: Expand student success initiatives to guide students to their goals and help them complete their degrees more efficiently;
  • CREATIVE USE OF SPACE: Leverage physical space more creatively and effectively across all parts of our education system, including sharing facilities and offering more flexible class schedules; and
  • REGIONAL PARTNERSHIPS: Create regional partnerships to align educational offerings with labor needs and lead or accelerate efforts on the previous two solutions.

With the release of the report, College Futures Foundation hopes to inform potential solutions that reimagine higher education in California for the 21st century economy.

“State leaders who care about educational opportunity, jobs, and our economy need to address the higher education capacity crisis,” said Lozano. “We can and must tackle these challenges to better serve our students and build a stronger future for California.”


Download Making Room for Success: Addressing Capacity Shortfalls at California’s Universities


Interested in more information?

Access the full underlying data decks from McKinsey & Company: Undergraduate Capacity Assessment Graduate Capacity Assessment Labor Market Analysis

Watch our informational webinar, featuring Monica Lozano, College Futures President and CEO, and Martha Laboissiere, Senior Expert with McKinsey & Company.