This two-part document, published in 1998, contains a report and blueprint that discuss the crisis facing California's system of higher education due to an influx of new students that the state cannot accommodate. The blueprint describes implementation of the report's recommendations for action include: (1) adopting strategies that smooth out the wide swings of support for the University of California (UC), the California State University (CSU), and the California Community Colleges (CCC); (2) stabilizing long-term funding for UC and CSU; (3) stabilizing the proportion of funds appropriated to the CCC; (4) annually adjusting the amount paid by students in public institutions; (5) providing students with financial aid in both public and private institutions; (6) using capacity within the independent institutions to accommodate student demand; (7) making efforts to use existing facilities more extensively; (8) changing fundamental structure and governance of CCC; (9) strengthening the system of statewide coordination and regional cooperation among higher education; (10) using new strategies for preserving educational opportunities and ensuring that institutions reflect the diversity of California; and (11) increasing the links between higher education and the K-12 schools. Contains 30 citations. (YKH)