ENROLLMENT: Fewer sophomores back for second year

State East Bay, Cal Poly Humboldt, Cal Maritime, Sonoma State and San Francisco State — are missing their state enrollment targets by 10% or more. They’re not paying a financial price for that, even as several other campuses are exceeding their enrollment goals by more than 10%.

So, a new plan: Any campus missing its enrollment target by 10% or more will permanently lose up to 5% of its state enrollment funding, which will then be sent to campuses exceeding their enrollment targets. This won’t go into effect until 2024-25 at the earliest, giving campuses time to plug their enrollment gaps.

In the subsequent two years, any campus missing its targets by 7%, and then 5%, respectively, would lose 5% of its state student enrollment funding each year.

The plan isn’t set in stone like a traditional funding formula. System leaders said its details can change.

“These actions are really intended to incentivize as much upward movement of campuses to and above their enrollment target,” said Nathan Evans, an associate vice chancellor and chief of staff who helps to oversee the system’s academic mission for students and faculty.

If this plan went into effect today, the seven campuses missing targets would lose a combined $38 million to other campuses — enough to educate 4,500 fulltime students — in the first year of the plan. Campuses with deeper enrollment holes would see steeper cuts.

Despite the shuffling of dollars, those seven under-enrolled campuses will “be funded at a higher level than their enrollment would justify” in the first year of the plan, said Jolene Koester, interim chancellor of the Cal State system. She made those remarks in response to concerns from some trustees that the plan deprives money from campuses already hurting for more students.

But unless those campuses staunch their enrollment losses, campuses stand to lose as much as 15% of their enrollment funding for the duration of this threeyear plan, explained system spokesperson Michael Uhlenkamp in an email. These “budget reallocations” would be permanent, he added, but campuses could recover their money if their enrollment rebounds.

The penalized campuses would also miss out on additional enrollment growth dollars that are part of Newsom’s compact with the system. That money — part of the more than $200 million in new state funds Newsom is promising annually — would only go to campuses meeting or exceeding their enrollment targets.

All of this additional money will help campuses meeting their targets hire more educators and add more classes.

The Cal State system has no history of rerouting money like this, Koester said, “but we are in a position where we have to take the risk of acting in order to fund the enrollment where the enrollment can take place.”

Multiple factors explain Cal State’s enrollment slide. Among them is the collapse of enrollment at California’s community colleges, whose transfer students typically account for a third of Cal State’s total student body. As a result, Cal State now enrolls the equivalent of 11,000 fewer new full-time transfer students than it did in fall 2020.

The biggest loss, though, is among existing students. Between fall 2020 and fall 2022, the equivalent of roughly 24,000 currently enrolled undergraduates disappeared from the Cal State system.

Part of the reason is that students on average are collectively taking fewer classes. In the last two years, students began taking 0.4 fewer units a term.

Another headwind is the number of students coming back for another year of study. Only 81.7% of last year’s starting freshmen came back for a second year, the lowest first-year retention rate at Cal State since 2008, and far below the 85.5% of freshmen who started their education in 2019.