There's good news and bad news on the higher education front in California these days, but so far the bad news is trumping the good.

First the good news: California high schools over the last few years graduated tens of thousands more students eligible for admission to a University of California or California State University campus than ever before. The 11 percent increase in eligibles is a sign of major progress in the state's elementary and high schools, playing out at the university level.

It's even more impressive since the increased academic performance crosses all ethnic lines. Improvement was especially remarkable among Latinos, where the number of high school grads eligible for the state's public universities leaped by 55 percent between 2003 and 2007, from 18,300 to 28,300. As an aside, if there were any remaining doubts about the benefits of the 1998 Prop. 227, which ended most bilingual education programs in the state, this ought to end them.

But now comes the bad news: All the improvements are likely to produce is a corps of thousands more frustrated young men and women.

Blame the Legislature

Because just as the number of eligible students increased — 13.4 percent of all high school graduates are now eligible for the University of California and 32.7 percent qualify for Cal State – the two university systems cut back the number of students admitted for next fall.

Because of the state budget crunch, Cal State campuses will have 10,000 fewer students this year than last, while U.C. has been less specific, but also has reduced enrollment on most campuses.

“Our public higher education systems face a growing challenge of accommodating more students with reduced state funding,” said Murray Haberman, executive director of the California Postsecondary Education Commission, as he released the new numbers on university-eligible graduates.

It's not just the lower number of slots available on the state's university campuses. There will be more demand for financial aid, too, because higher numbers of eligible students also mean higher numbers of needy students applying. So long as admissions remain “need-blind” (conducted without regard to applicants' finances), a larger pool of applicants always will translate to a need for more scholarships. Add to that the fee increases are likely to come, as you may have noticed by this morning’s newspapers.

Don’t Forget Community Colleges

But money for much-needed scholarships may be scarce for the next few years, if only because state legislators seeking ways to cut the budget almost invariably make universities a prime target.

That's an especially nasty prospect now, as a report from the San Francisco-based Public Policy Institute of California concluded a few months ago that the state's economy could falter over the next 20 years because not enough college-educated workers are moving here and the state can't graduate current residents fast enough to meet employers' likely upcoming needs.

The Public Policy Institute claimed California needs to nearly triple the number of highly skilled immigrants coming here from other states and countries or many businesses will locate elsewhere. This study is strong evidence that cutting university budgets in times of economic stress is both shortsighted and anti-business. That's highly ironic when the leading advocates of cutting higher education are usually the same politicians who claim to be most pro-business, the ones concerned about industries and jobs migrating out of state.

Example: Gov. Schwarzenegger, who talks ad nauseum about boosting business, proposed a $132 million cut in university funding as part of his budget-balancing plan late last year. The Schwarzenegger plan got nowhere, but not because of the proposed higher education cuts.

Of course, just because more students qualify for university admission at the precise time that universities are closing many of their slots does not mean students must quit learning. To the contrary, they can use community colleges as stepping stones, the way Schwarzenegger himself did when he attended Santa Monica College in the 1970s.

But it's sheer pretense to claim that most junior colleges can offer the stimulation and quality of faculty available at university campuses.

So even if the newly-eligible, but now turned away, students do not desert higher education out of frustration, they will nevertheless lose because of the budget crunch.

And that will be a long-term loss for all Californians, which is the worst thing about the good news/bad news scene in higher education today.

Mr. Elias may be contacted at tdelias@aol.com

For more of his columns, visit www.californiafocus.net