California’s public higher education system is meant to be the engine of the California Dream. But is that engine sputtering?

In my new blog I’ve tried to summarize the key trends from recent articles published by the PPIC Higher Education Center. The importance of this blog is to make their complex findings accessible, so every Californian can grasp the urgent challenges threatening the promise of opportunity in our state.

First, the good news: a college degree is still an incredible investment. California workers with a bachelor’s degree earn, on average, 61% more than those with just a high school diploma. This benefit grows over time, expanding from a 47% advantage for recent graduates to a 66% premium for mid-career workers. This degree also provides a crucial economic buffer; during the worst of the COVID-19 recession, the unemployment rate for workers with no college was 18%, nearly double the 10% rate for those with a bachelor’s degree. But these powerful averages mask a high-stakes reality. The value of a degree is heavily influenced by a student’s major—for example, STEM graduates saw a median wage of $120,000 in 2023. Most importantly, the full benefit depends on completion. Students who leave with debt but no degree are nearly twice as likely (22%) to have delinquent loans as their peers who graduated (12%).

Even for students determined to get that valuable degree, a strange affordability paradox stands in their way. California has done a great job tackling tuition. Thanks to robust financial aid, over 60% of CSU students and over 50% of UC students pay no tuition at all, and California students take on far less debt (23% take loans) than the national average (39%). The real crisis isn’t tuition; it’s the crushing total cost of attendance. For a student living off-campus, housing and food can account for a staggering 72% of their budget at a community college. The state is beginning to respond with new strategies, like streamlining access to CalFresh and Medi-Cal on campus. For instance, a student who can enroll in Medi-Cal can waive a university’s health insurance plan, potentially saving thousands of dollars per year.

This financial strain is made even worse by a problem that begins long before students set foot on campus: the college readiness gap. California boasts a high school graduation rate of 86%, but this masks that most graduates aren’t ready for college-level work. In fact, the readiness rate has declined since the pandemic; only 22% of high school graduates were prepared for college-level English and math. This is also a massive equity crisis. While 32% of white students meet the readiness benchmark, the rates plummet to just 13% for Latino students and 8% for Black students. This under-preparation forces students into remedial courses that cost money and use up financial aid eligibility but don’t provide credits toward a degree, creating a detour that many can’t afford.

For the hundreds of thousands of students who begin at a community college, this lack of preparation feeds directly into a profoundly broken transfer pipeline. This pathway is supposed to be the great equalizer, but it’s one of the system’s biggest leaks. An overwhelming three-quarters of community college students say they want to transfer, but only about 21% manage to do it within four years. In regions like the Inland Empire, the situation is even more dire, with the lowest transfer rate in the state. While policies like the Associate Degree for Transfer (ADT) are designed to help, the core problem remains a bottleneck that disproportionately blocks low-income and underrepresented students from earning a bachelor’s degree.

All these individual leaks—in affordability, readiness, and transfer—combine to create the ultimate challenge for the state: a “homegrown” degree deficit. California has set an ambitious goal for 40% of its working-age adults to hold a bachelor’s degree by 2035. The state is on track to meet this goal, but only because it’s importing talent. A staggering 57% of residents born outside California have a college degree, compared to only 35% of California-born young adults. This has led researchers to suggest a more meaningful goal: raising the degree attainment rate of young, “homegrown” Californians to 45%. To do that, California must fix every leak in its educational pipeline, from kindergarten to college completion.