This report presents the results of an examination by Rand Corporation of external environmental factors affecting the Northridge campus of Canlifornia State University. For institutions of higher education, especially public institutions, these external environmental factors may include fiscal, demographic, labor market, political, legal, technological, and social forces among others. The report focuses on the existing state of affairs and projected trends for fiscal and demographic matters, and the political context. The report predicts that major spending programs will grow faster than state revenues; that mandated expenditures and entitlements will consume almost all General Fund revenues; and that there will be a growing squeeze on public services, particularly higher education. Two demographic trends will directly affect enrollment: (1) the population age group that has traditionally composed the bulk of the school's total enrollment is shrinking and will continue to shrink over the foreseeable future; and, (2) although Hispanics will be an increasingly large proportion of this population, historically low Hispanic enrollment rates suggest this is unlikely to create a corresponding increase in total enrollments. Political response is constrained by increased demand for health and welfare services and K-12 education implied by demographics, lowered expectations of federal aid, and increased state spending on corrections. (MAH)