Study suggests that in the long run, it would actually save taxpayers money.

California's college-age population is growing, and if the state doesn't invest more money in higher education and financial aid, it's going to have greater numbers of people in jail, living in poverty and jobless, according to a study by UC Berkeley researchers.

The study, commissioned by the bipartisan Campaign for College Opportunity, for the first time breaks down the financial cost of doing nothing in light of changing demographics -- as well as the financial benefits of taking action now.

As a general rule, the study found that for every new dollar the state spends on community colleges, public universities and student financial aid, it will receive $3. Conversely, for every dollar California doesn't spend, it will have a net loss of two tax dollars.

The 1960 Master Plan for Higher Education may have helped California create an excellent higher education system, but over the years the state's investment in higher education hasn't consistently kept up with the growing student population. That in turn is jeopardizing California's goal of providing an education for everyone who wants one, say leaders with the Campaign for College Opportunity, a coalition founded by the California Business Roundtable, the Mexican American Legal Defense and Educational Fund and the Community College League of California.

"This governor and the Legislature now have an opportunity, a precious window of time to ensure that college access is expanded for our growing young population," said the group's executive director, Abdi Soltani. "If we sit back ... we're going to have a shortage of people with a college education. We don't want to leave this to the random decision of individuals. We want the state to have a college opportunity plan that moves us in the right direction."

Campaign leaders plan to use the report - "Return on Investment: Educational Choices and Demographic Change in California's Future" -- as a starting point for discussions with Californians about ways to improve access to college. They have undertaken a 20-city tour that began Wednesday in Sacramento and will continue through January. The campaign hopes to come up with a legislative agenda in the spring.

Between 2000 and 2015, the college-age population is expected to grow 27 percent to 4.26 million people. But if trends continue, some analysts say, California won't have nearly enough college-educated people for the state's workforce needs. Campaign leaders say California must spend more money on higher education now to reap the economic benefits in the future, and yet the study doesn't suggest where the money should come from or how it should be used.

The detailed, 120-page study looked at several scenarios: from doing nothing and freezing the capacity of California's community colleges and public universities at current enrollment levels to the ideal scenario of increasing the rate of students attending college as well as the rate of students completing college.

If capacity was frozen, the study reported, the state would lose $1.5 billion over the lifetime of each yearly group of graduating high school seniors ready to attend college. If the state increases both college-attendance and college-completion rates, California could realize more than $3.3 billion in added tax revenues for each yearly group of graduating high school seniors.

By the time those students turn 35, the study contends, the state will have been repaid for its initial investment and simply be making money over the next 30 years.

That's because better-educated people are likely to pay more taxes and use fewer social services. They are also less likely to be jailed.

Welfare use among college graduates is a quarter of that of those who hold just a high school diploma, according to the report. A Californian with a high school education is nine times more likely to spend time in jail than someone with a college education.

"It's a better quality of life for everyone in California," said political science Professor Henry Brady, the study's lead author and director of UC Berkeley's Survey Research Center. "It's a way by which California can maintain its greatness and maintain itself as a golden state."

Not everyone agrees with the report's contention that California faces a boom in the college-age population.

Steve Boilard, director of higher education for the state legislative analyst's office, said that if California saw 27 percent growth between 2000 and 2015, as outlined in the report, that would be only 1.8 percent growth annually. This year, the state funded the community colleges at 3 percent growth and California State University and the University of California at 2.5 percent.

"What they're projecting is much less than we're funding this year," he pointed out.

Patrick Callan, president of the National Center for Public Policy and Higher Education in San Jose, differed with Boilard.

California may be adequately funding public higher education this year, Callan said, but the problem is the state doesn't have any real long-range plan and finances its system in an ad hoc manner.

Callan said his organization found, for example, that in 2003 an estimated 175,000 students were shut out of public higher education by budget cuts that reduced course offerings.

Callan added that the findings by the UC Berkeley researchers were consistent with those of other studies that show states reaping economic benefits by investing in higher education.

"California has never developed a comprehensive plan for how we're going to accommodate this growth and how we're going to pay for it," he said. "Instead, we've been taking it year to year. In the good years we do OK. In the bad budget years we not only reduce enrollment, we bump up tuition."

One area the state needs to improve is the college-going success of Latino and African-American students, say campaign leaders.

Of the projected growth in California's college-age population, Latinos will make up nearly half to two-thirds of it. But less than one-third of 18-year-old Latino students will attend college, and only 15 percent will go to a four-year university, the study reports. Less than one in 10 will graduate with a bachelor's degree.

African American 18-year-olds attend college at the average rate but don't have a good track record of transferring out of community colleges or graduating from the state's two university systems -- California State University and the University of California. So in the end, African American students are no more likely to earn a bachelor's degree than Latino students.

Solutions to these problems are what campaign leaders hope to discuss with residents across the state over the next couple of months.

Back in 1960, when the Master Plan for Higher Education was introduced, California's per capita income was 25 percent above the national average, and Californians were 25 percent more likely to have graduated from high school and college than people in other states, campaign leaders point out.

Now, California's per capita income is just 6 percent above the national average. Californians are just 10 percent more likely to have attended college and are 5 percent less likely to have graduated from high school.

"California is at a crossroads," said Brady. "We're in danger of going from great to just good enough."