Fifty years ago, state policymakers and higher education officials adopted California's Master Plan for Higher Education. This plan still largely defines policies concerning the state's public higher education systems: the California community colleges (CCC), the California State University (CSU) system, and the University of California (UC) system. Updating key components of the Master Plan is a crucial part of the effort to close the education skills gap. This report proposes three strategic modifications to the plan: (1) Eligibility goals for the CSU and UC systems should be gradually increased to new levels by 2025. The share of the state's high school graduates eligible for UC should grow from the top 12.5 percent to the top 15 percent of high school graduates. The share eligible for CSU should grow from the top 33.3 percent to the top 40 percent; (2) The Master Plan should set explicit goals for transfer from the community colleges to UC and CSU. A target for larger shares of bachelor's degrees awarded to transfer students at both systems should be defined; and (3) A new component of higher education policy that focuses on outcomes--specifically, completion rates--should be added to the Master Plan. An important consideration in adopting these goals is whether sufficient numbers of California's high school graduates will be college-ready. This report considers both the current college-readiness of California's high school students and the potential of remediation programs--programs designed to help college students improve basic skills. It finds that CSU's approach, which requires that students complete all remediation work within one year, is highly effective and recommends that a similar approach be adopted by community colleges. A bibliography is included. (Contains 3 tables, 6 figures and 48 notes.) [This report was written with the support of Qian Li. For the technical appendix, see ED515620.]