Report recommends more oversight of spending on Cal State graduation efforts

If state lawmakers decide to continue funding California State University’s efforts to improve graduation rates, they should tighten oversight of how those dollars are spent, California’s nonpartisan fiscal and policy adviser said Wednesday.

The Legislative Analyst’s Office (LAO) reported that while CSU’s Graduation Initiative 2025 had mixed success at the end of its 10-year run, a lack of detailed financial reports clouds lawmakers’ ability to assess which interventions were most cost-effective. As CSU works to implement new and more wide-ranging criteria for student progress, the analyst’s office calls for lawmakers to more closely track future spending across the 22-campus system.

LAO recommends state lawmakers “continue to monitor whether existing programs are meeting their objectives cost‑effectively and make adjustments accordingly. While a new CSU graduation initiative likely would provide some state benefits (such as enhanced economic mobility), those benefits could be less sizable or less significant than the potential public benefits of other state programs.”

Funding for the graduation initiative grew from roughly $50 million in 2016-17 to more than $400 million annually by 2024-25, an LAO analysis found, backed by state and tuition revenue. Systemwide, Cal State had more success in increasing two-year graduation rates for transfer students and four-year rates for freshmen, but saw slower progress on six-year freshmen and four-year transfer rates. Achievement varied widely among campuses.

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LAO’s interviews with campus administrators suggested the graduation effort had several positive effects beyond raising completion rates, including better Cal State data systems and heightened public scrutiny that held campuses accountable for students’ success.

But LAO found that CSU campuses struggled to balance multiple graduation objectives. Cal State also has not provided enough data to the state about how much campuses spent on specific activities like tutoring, academic advising and mentoring, LAO noted. Data on students’ use of those services also wasn’t available for Graduation Initiative 2025, though recent CSU survey results suggest use of counseling and career services is relatively low.

CSU is now launching a new and broader framework for measuring student achievement, which includes not only graduation rates, but metrics like placement into jobs or graduate school and post-graduation earnings.

If lawmakers opt to back those goals, LAO recommends they explicitly link funding to a single objective and set a formula for how the money is divided among CSU campuses. LAO also calls for campuses to release consistent annual tables breaking down spending and student utilization rates.