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System Characteristics and History

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The University of Santa Clara and the University of the Pacific, private institutions founded in 1851, were the first two universities in California. Public postsecondary education in California began in 1862 with the opening of what is now San Jose State (a CSU institution) as a normal school. The University of California was created in 1868 and the first junior college program began in Fresno in 1910. By 1959, just before the creation of the Master Plan, each of these segments had experienced substantial growth and significant change.

While the Legislature authorized the creation of separate junior college districts in 1921, most junior colleges were operated by high schools and unified districts throughout their first half-century. This early relationship with K-12 continues to blur their status as a part of higher education. The enactment of Proposition 98, which established the same guaranteed funding mechanism for community colleges as for public schools, has, in the minds of many, created further confusion.

In 1920, the Legislature abolished local governing boards for its seven normal schools and reorganized them under the state Board of Education and the superintendent of public instruction, an arrangement that continued until after adoption of the 1960 Master Plan. In 1935, normal schools were renamed state colleges and authorized to expand their curricula beyond teacher education.

During this same period, the University of California, which from its founding enjoyed a unique status as a public trust governed by a Board of Regents, grew beyond its original campus at Berkeley to include additional sites in San Francisco, Davis and Los Angeles. Meanwhile, private institutions grew to serve a substantial share of the market. Unlike their eastern counterparts, however, they operated in the shadow of a large and an ambitious assortment of public institutions.

In 1959, when California was experiencing immense growth, some state and community colleges wanted to become four-year universities. Private colleges were threatened by what they considered the insensitive expansion of the public segments. Dozens of bills were being considered by the Legislature to resolve such questions as: where to locate new campuses; who should offer professional and graduate training; what should be the admissions requirements for each public segment; and how should the public segments be coordinated. Over the next 18 months, a coalition of educational leaders-guided by Clark Kerr, then president of the University of California; Roy Simpson, the superintendent of public instruction representing the state colleges; and Arthur Coons, president of Occidental College-produced the Master Plan for Higher Education, which became law when the Governor signed the Donohoe Act in 1960. The plan, which became a model for the nation and the world, has recently been described by one of its principal architects as a negotiated "treaty among the constituent parts of higher education in California that would, at the same time, be acceptable to the Governor and the Legislature of the state."

Under the Master Plan, higher education consisted of a public sector (University of California, California State University, and the California Community Colleges) and an independent sector. The University of California would admit the top 12.5 percent of high school graduates and have exclusive responsibility for doctoral degrees and professional programs beyond the master's degree. State colleges, which would admit the top one-third of high school graduates, were given their own Board of Trustees and the opportunity to offer master's degrees across the board. They were also granted the authority to offer joint doctorates with the University of California. Almost as an after-thought, community colleges were assigned the role of providing access; all high school graduates were eligible to attend the community colleges and those who succeeded in earning an associate's degree would be guaranteed the opportunity to go on to a baccalaureate degree at a public university. Finally, the Master Plan provided for a Coordinating Council made up of representatives from the three public segments and the private sector.

The plan represented a compact among citizens, the institutions, and state government. It promised the state an orderly system of higher education where institutions had clear missions and where planning in the public interest would determine the location of new facilities and services. For every qualified adult citizen, an undergraduate space would be available with the cost for instruction paid by the state. Public institutions were promised that the state would support a first-rate system of higher education with faculty, equipment, and facilities among the very best in the nation. Independent institutions were offered a state program of student financial aid. Over time, additional elements with fiscal implications became identified with the original Master Plan, including: faculty salaries at public institutions competitive with similar public and private institutions; special assistance for the disadvantaged, the under represented, and those with special needs; geographically convenient opportunities; and employee collective bargaining.

In the more than 30 years since the provisions of the Master Plan became law, the Master Plan has been revisited no fewer than five times, the most recently in 1986. Among the more important changes resulting from these restudies has been the creation of the California Postsecondary Education Commission, with strengthened authority and a majority of public members as successor to the original, institutionally dominated Coordinating Council. There have also been a number of attempts to reform community college governance.

Shortly before the beginning of our study, higher education in California consisted of:

• The University of California, with eight general campuses, one health science campus and numerous research facilities. In 1995, the University of California served 163,256 full- or part-time students, 39,519 of whom were post-baccalaureate. The UC has sole authority within the public segments to award doctoral degrees and exclusive jurisdiction over the professions of law, medicine, dentistry, and veterinary medicine.
  
• The California State University, with 22 campuses. In 1995, CSU served 325,976 full- or part-time students, all but 61,581 of whom were undergraduates. CSU is authorized to award the doctoral degree jointly with UC or a private university. Faculty research is authorized only to the extent that it is consistent with the instruction function.
  
• The California Community Colleges, with 71 locally governed districts operating 107 colleges. In 1995, these colleges, which accept any high school graduate or person over age 18, enrolled 1.1 million full- or part-time students. The colleges offer lower division academic programs, a wide variety of technical and occupational programs, as well as instruction in basic skills, English as a Second Language, and citizenship. The locally governed districts are loosely overseen by a statewide Board of Governors.
  
• One hundred and forty-seven private four-year institutions and 36 private two-year institutions that in 1995 collectively enrolled 231,337 full- or part-time students, 47,580 of whom were graduate students. While private institutions enroll only about 15 percent of all students, they account for more than one-fourth of all baccalaureate students, more than a third of all graduate students, and well over half of the doctoral and first professional enrollments.
• The California Postsecondary Education Commission charged with overseeing the system.
• The Student Aid Commission, which administers state and federal financial aid programs.
  
• The California Postsecondary and Vocational Education Commission, which regulates private higher education institutions.
  

Table 3 provides data on overall enrollment trends in California, by segment of higher education. The University of California and the independent colleges and universities experienced enrollment increases from 1985 to 1995. Enrollments at Cal State and the community colleges, however, were almost the same in 1995 as they were in 1985, primarily because significant enrollment declines in the early 1990s negated enrollment increases in the late 1980s.

Table 3 Enrollment in California Higher Education
	1985	1990	1995	% Change 1985 to 1995
CCC	1,176,712	1,394,563	1,174,904	-0.15%
CSU	324,626	369,053	325,976	0.42%
UC	147,957	166,547	163,704	10.64%
Independents	197,130	177,077	231,337	17.35%
Source: CPEC, Student Profiles 1996 (Sacramento: 1996), not paginated.

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Current Perspectives on the California Higher Education System

The complexities of three separate public systems are intensified by differing structural arrangements within each of the three public segments. The University of California operates as an organic model, CSU functions mostly as a state bureaucracy, and the community colleges most resemble a loose confederation. System offices and individual campuses are loosely coupled in CSU's system and even more loosely coupled in the UC system, providing substantial campus autonomy. In the case of community colleges, it is not clear that the system office has the capacity to do anything other than monitor the statutory environment within which individual campuses do whatever they please. A writer for Harper's Magazine has suggested "anarchy" as the consequence of institutional disconnects and voter interventions.

The litany of complaints from those we spoke with concerning the existing system is lengthy. There are no structural arrangements that encourage institutions to work together or keep track of examples of collaboration and report them. The separate systems go their own ways, negotiating their own deals with the Governor and the Legislature with the whole presumably guided by the invisible hand of the Master Plan. Those we interviewed wondered whether California can really afford the level of investment to maintain fairly autonomous large segments operating in their own self-interest. Among the system descriptions they provided: "mired in the past seeking self-preservation rather than adjusting to the future;" "too rigid to permit needed forms of regional collaboration;" and "facilitates primarily protection of turf."

Most, however, said that they consider system weaknesses to be strengths as well. A senator told us, "The greatest strength is stability provided by the three-system structure and the relative autonomy that individual institutions have. This is also a weakness because it makes it very easy for institutions and those within them to become complacent and to insulate themselves from societal change." A CSU president, who acknowledged the need for reexamination, described the Master Plan as "a wise and thoughtful commitment to have as many people as possible well-educated." The president added, "The genius was in tiering the system so that legitimate goals for each segment were defined and system interconnection required through transfer." A UC chancellor valued the Master Plan because it allowed for "peaks of competence" in the system. A CSU representative identified as key strengths the public's confidence in the excellence of the public university system and the public's assumption that everyone should have the ability to go to school.

Most of those we interviewed attributed weaknesses to poor leadership. Virtually no one said there is a need to change the structure. A member of the Assembly acknowledged that the system had a certain cumbersome quality but liked its orderly character. He did not believe that changing the structure would change the way people behaved. A former member of the UC Board of Regents described a need for improved collaboration, but added that he would oppose altering the tiered character of the system in order to achieve better collaboration. And the Legislature recently rejected a bill that would have added a regional structure for higher education.

The roots of resistance to change are not difficult to trace. They include the power of the Master Plan, as represented in its acceptance and recognition around the world, as well as the results that the plan has produced in California. As one respondent said, "California has a very fine public system, a world-class system at unbelievably low prices to consumers. It wouldn't be realistic to break up a system with which people are reasonably comfortable." On the basis of our study, California appears to be an unlikely candidate for other than marginal change stimulated either by the market or by negotiations around the annual budget. The paradox is that few believe the system can respond to the larger issues it will confront in the next century without significant change.

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California Postsecondary Education Commission

The commission is composed of 17 members, nine of whom are appointed from the general public, three by the Governor, three by the Senate Rules Committee, and three by the Speaker of the Assembly. Six members represent various segments of education, including the UC Board of Regents, the CSU Board of Trustees, the statewide Community College Board of Governors, the state Board of Education, and the California Postsecondary and Vocational Education Commission. One member is appointed by the Governor to represent independent institutions. The remaining two members are students, both appointed by the Governor. The commission's executive officer is appointed by the commission and serves at its pleasure.

More so than the segments, CPEC takes a statewide perspective. Judging from our interviews, however, this role is not particularly valued. A UC chancellor said, "We have coordination when we want it but not when we don't." Few people want CPEC to play a stronger role. A CSU executive said, "If the Governor or the Legislature had a fundamental interest in higher education, they wouldn't think of CPEC as an instrument for implementing their interest. When the Legislature wants to study the Master Plan, they appoint a lay commission and a blue-ribbon citizens' commission. They do not rely on CPEC." The absence of any close relationship between CPEC and the Governor and the Legislature is evidenced by recent cutbacks that have cost the commission one-third of its staff.

CPEC was founded to be an independent voice on higher education, but there are not a lot of teeth in the legislation. A legislative staff member said, "While their statutory role is a coordinating body, they are too captive of the segments." CPEC does provide a neutral arena for the discussion of non-controversial issues among the systems. The agency has been very vocal on strengthening the role of independent institutions. It has recommended changes to the Cal Grant A program to increase student options in the private sector. It also proposed a cap on student fees that the segments successfully resisted because fees are bargaining chips in budget discussions. CPEC representatives believe some of their interventions bear fruit even when they do not receive credit. For instance, while UC took exception to an effort by CPEC to initiate a discussion on regional planning of graduate programs, the university is now looking at its programs on a campus-by-campus basis. CPEC would have liked the discussion to include CSU and independent institutions, but that possibility seemed unlikely at the time of our study. CPEC also takes credit for helping to establish the Council for Private Postsecondary and Vocational Education, which now has a seat on CPEC and represents proprietary institutions, which typically specialize in short-term training.

Providing information may be CPEC's most important current function. Annual commission reports deal with such issues as faculty salaries, executive compensation, and higher education performance. There are fact books on fiscal profiles and student profiles as well as topical reports in such areas as: "Three Strikes" legislation; planning for projected increases in student enrollment; improved outcomes; and community college student charges. Most policy makers believe these reports raise only those issues that institutions want to have raised. A community college spokesman told us, "The amount of staff time spent looking at CPEC studies or responding to them is very small. They are not central players." A CSU executive acknowledged that CSU and UC manipulate the categories of CPEC's marginal cost analyses to tell the stories they want told: "CSU and UC work closely with CPEC to be sure that the organization doesn't tell a different story to the Legislature than the one being told by their organizations." A senator described the "contradiction between official word and truth. You go to CPEC for a version but you expect them to put a spin on it." A UC regent said that so far as he knew, CPEC has no influence on the Regents. He described with some annoyance a presentation CPEC made to the Regents when affirmative action was up for discussion, terming it a "classical example of double-speak about equity and social justice." He added that CPEC seemed to be walking a fine line and saying nothing of substance that would irritate the educational establishment.

If CPEC reports have marginal impact, the fault may not lie solely with CPEC. A CSU executive told us the state makes policy by anecdote. If an executive summary of a CPEC report reaches a slightly different conclusion that is counter-intuitive, legislators will pay attention. Otherwise little attention is given to reports. A senator confirmed that legislators most often get information by anecdote, by personal experiences, and through cocktail party talk. He added, "There are a series of reports that are available to legislators such as those put out by CPEC and legislative analysts. While these are important, their impact is really overrated. Unless someone has a real interest in an area and takes the extra time to wade through some of these reports, they are not likely to pay them much attention."

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The California Education Roundtable

First organized in 1979 to address student outreach and teacher preparation issues, the Roundtable has also focused on issues such as articulation and transfer, the interface between K-12 and higher education, and teacher preparation. Its initiatives are carried out largely through the Intersegmental Coordinating Committee (ICC), its operating arm. From a legal point of view, the roundtable is independent of CPEC, although the executive director of CPEC participates as a roundtable member.

Most of those who are not part of the education establishment-and many who are-view the potential of this organization as limited. A legislative staff member told us, "The Education Roundtable performs some coordinating responsibilities but it is really a group of insiders being able to talk to one another." A community college spokesman described it as a way to force segments to sit down occasionally. A former CPEC staff member described the roundtable as an excellent vehicle for expressing the establishment view in higher education. He added that it is not a forum that examines public interests except as those may coincide with the interests of the various segments. A spokesman for the private sector said the effectiveness of the roundtable is heavily dependent upon who is sitting at the table. For many years it was, he said, a "mandarin exercise."

The most controversial agenda item currently under consideration by the roundtable is a Rand study funded by the Hewlett Foundation (headed by David Gardner, a former UC president) to deal with such Master Plan issues as student flow and enrollment demand, innovative responses to change, and issues of long-term funding. To some degree, these issues duplicate what CPEC has already done or is doing. A state senator, clearly no fan of Gardner, described the study as "sending foxes to guard the hen coop." He said he sees the study as a possible strategy to reduce student demand to what segment heads believe the market ought to be. Since roundtable members do not want the organization seen as an attempt to supplant CPEC, they plan to bring their recommendations from the Rand study to CPEC.

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The Student Aid Commission

In the budget process, legislators favor keeping tuition and fees stable rather than providing additional funding to state financial aid. The result has been to drive up the grade point average required to qualify for Cal Grant A. This trend favors the more selective universities and private institutions. While Cal Grants did increase from 1991 to 1995, only one out of every five qualified students received a Cal Grant in 1995. For Cal Grant A, competition for funds occurs primarily between students at the University of California and those at private institutions; for Cal Grant B, the competition is primarily between students at Cal State and those at the community colleges. The public segments have opposed increased support to students attending private institutions. The maximum grant in 1995-96 was about $5,200, well below the average subsidy for students attending comparable public institutions. During our study, there was talk about raising the level of aid for new recipients to approximately $7,000, an amount that was calculated as the average public subsidy at UC or CSU, plus the average state grant. This change was approved by the Legislature and signed by the Governor in the 1996-97 budget.

Because so few of the eligible students receive state grants, institutions have had some proportion of their fees set aside from tuition revenues for financial aid at least from the 1960s at the University of California and from the 1980s at Cal State. The philosophy behind institutional aid is that the decision on institutional fees is one of the last made in the budgeting process. Institutions need some flexibility to assist students because of the lack of predictability of the fee structure. Amounts were very small until the early 1990s. As a result of fee increases, however, the set-aside now equals one-fourth to one-third of the total amount collected in tuition and fees. Part of the Governor's agreement on budget increases is that 30 percent of any increase in fees will be used for financial aid.

Recycled fees in public institutions now account for more aid than the state provides directly to students. Policy leaders have looked for alternatives to the current way aid is administered, including decentralizing the selection process, but the leaders cannot agree on a different approach. There is growing concern about by-passing the state responsibility for preserving access as well as the constitutional prohibition on direct funding to private institutions. A law was adopted in the late 1980s to prescribe the relationship between fees, tuition, and access, but the legislation was never funded.

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