How can California produce the number of college graduates its future economy will need when its public higher education system is staggering because of the ongoing budget squeeze? Unfortunately, the state's public universities and colleges won't receive any of the unexpected surge in new tax revenue and will continue to scale back their enrollments. If the tax extensions sought by Gov. Jerry Brown are not approved, enrollments will likely shrink further.

California's private nonprofit and for-profit colleges and universities, by contrast, are in relatively good financial shape. Enrollments in most institutions are holding steady or are up. Endowments and philanthropic giving are on the upswing. Tuition is still higher than in the public schools but is rising at a slower pace.

If these two higher-education systems would put aside their long-running competition for students, faculty and resources, and cooperate to boost graduation rates, they could go a long way toward turning out the 1 million more credentialed individuals – according to one study – the economy will need in 2025. Heresy? Hardly.

There are three important ways the public and private sectors can work together to produce more graduates.

• Shifting the remedial burden to the private sector: California's public schools and universities are lousy at remedial education. Sixty percent of entering Cal State students have to complete at least one remedial course when they arrive at college. It's a task that consumes professorial and student time, and is ill-suited to the mission of graduating students.

For certain private nonprofit and for-profit schools, however, remedial education is a forte. They have experience in dealing with learning deficiencies and are adept in tutoring and some forms of special education. Unencumbered by competing missions, they can focus on the remedial task at hand. And monitoring their success rates would be as easy as grading exams.

• Making it easier to complete required courses: Currently, a student seeking to transfer credit to another school faces too many institutional and faculty hurdles. An "A" in English 101 at Los Angeles City College isn't automatically credited at UCLA.

The state took a baby step this year toward clearing up the uncertainty with the Student Transfer Reform Act, which guarantees junior status at Cal State schools to community college students who earn an associate degree. There is no reason why such a relationship should only exist between community colleges and Cal State.

To facilitate transfers, all accredited institutions would adopt a common course-numbering system that ensures that students learn similar things regardless of where they took the class. For example, credit for completing English 101 at a community college would automatically transfer to a UC or a private college or university. Not only would general education requirements be part of this system but preparation courses for students' majors as well. Arizona has set up such a credit-transfer system, and initial reports are that it is producing more graduates faster.

• Encouraging private colleges to admit more students, especially through online learning: To get private colleges to admit more students, the state might pick up a portion of the tuition difference between private and public schools. That, no doubt, would bring howls of protest – taxpayers giving money to well-heeled privates. But consider UC's newest campus in Merced, currently with 4,000 students. The state could surely find cheaper seats for those 4,000 students in California's 79 private institutions than pay $500 million and counting to complete the campus.

But more private admissions can't begin to close the graduate gap. A significant state-led effort to increase online education would have far more impact – and the private nonprofit and for-profit sectors are best qualified to lead it because they are doing it now and want to grow. Given their checkered history, participation by the for-profits would have to be tightly regulated.

State-led online education is not unprecedented. Already, 29 states have K-12 online learning. Indiana has taken it to the next level. Gov. Mitch Daniels contracted with Western Governors University – a private nonprofit that has created a robust online platform – to set up an online-only university. The state does not directly invest in the school but allows students to use state financial aid to attend. Daniels calls it "Indiana's eighth state university."

Many faculty dislike the idea of turning their courses into online ventures. They insist online learning, despite improvements in the technology, is inferior to the best courses offered by tenured faculty. But the best faculty does not teach most classes, and thousands of students can't get into any classes, and if they do, they are likely to sit with more than 300 students.

California's persistent budget squeeze and anti-tax mood erect a high hurdle to increased graduation rates. Only a coordinated effort of its five higher-education systems – three public and the nonprofit and for-profit privates – can produce the number of graduates the economy will need. There's still plenty of room for spirited competition, but California's economy needs all five on the same team to remain competitive globally.

William G. Tierney is director of the Center for Higher Education Analysis at the University of Southern California.

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William G. Tierney is director of the Center for Higher Education Analysis at the University of Southern California.

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