About 144,000 college-ready students will be turned away annually from California’s four-year higher education institutions by 2030—double the number being kept away now, according to a new report released today by the College Futures Foundation. The higher education capacity crisis poses a serious threat to the state’s economy and will widen already deep racial, income, and geographic inequities.

“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.”

The report, Making Room for Success: Addressing Capacity Shortfalls at California’s Universities, is based on an analysis commissioned by College Futures and conducted by McKinsey & Company that examined capacity in the California Community Colleges, the UC, the CSU, and private California colleges and universities.

“More California students than ever before are graduating from high school ready for college, but tens of thousands are being turned away,” said Lozano. “At the same time, our state is projected to have a shortfall of 1.1 million workers with a bachelor’s degree by 2030. The higher education capacity crisis we are facing is an enormously important economic issue for our state.”

One example of this challenge: Health care, the state’s largest industry, will continue to lead job growth, with an increase in jobs of more than 31 percent projected through 2030. In 2017, the state needed 240,000 more registered nurses than were available, but nursing programs are currently impacted across the UC and CSU systems.

The capacity crisis disproportionately impacts students from groups that are underrepresented in college, including students from low-income families and communities of color. Many students already face formidable socioeconomic barriers to college and cannot afford the additional burdens of moving to educational opportunities outside their region or state.

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.

“Meeting the projected shortage of skilled workers depends on increasing capacity at four-year colleges and dramatically raising the rates of college success for students from low-income families and communities of color,” said Lozano. “Imagine the young students today who will work hard to get the grades and meet the eligibility criteria, only to find out that our higher education system doesn’t have capacity for their dreams of a four-year degree. That’s the reality we are facing if we fail to address this crisis.”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.

While California Community Colleges and private two-year schools have varying degrees of available capacity, relying on them will not make up for the shortfall at the universities. Even if students qualified for the CSU or UC who are turned away are sent to the estimated 44,000 extra seats available at two-year institutions, that would still leave up to 100,000 students without a spot in the higher education system.

Estimates of future job openings in California suggest that nearly twice as many bachelor’s degrees will be required relative to associate degrees (or those with some college) by 2030 as the economy continues to demand more technical, creative, and critical thinking skills.

Graduate programs are also struggling with capacity issues. By 2030, space in advanced degree programs, required for high-demand jobs in sectors such as health care and technology, will have to turn away about 21,000 qualified applicants per year, even as the state faces an annual shortfall of 168,000 workers with graduate 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.”