The value of education has rarely been disputed in the United States. The importance of education has been so critical to the country's well-being that elementary and secondary education has been a free public good and postsecondary education has been heavily subsidized through grants to public institutions and to students. In this report, the authors discuss the problems that exist if California is going to meet its economic and civic demands. Too many students drop out of high school and too few go on to college. Too few transfer from community college and too many do not finish at either a community college or four-year institution. Too many are unprepared for college and not enough benefit from remedial classes once in college. Not enough are prepared for the workforce whether they graduate from high school or college. They then put forward two types of reforms that help to resolve the issues that have been outlined: (1) Major System Reforms; and (2) Modest Reforms.