This state report card is derived from "Measuring Up 2004," the national report card for higher education. Its purpose is to provide the public and policymakers with information to assess and improve postsecondary education in each state. "Measuring Up 2004" is the third in a series of biennial report cards. The report card grades states in six overall performance categories: (1) Preparation: How adequately are students in each state being prepared for education and training beyond high school?; (2) Participation: Do state residents have sufficient opportunities to enroll in education and training beyond high school?; (3) Affordability: How affordable is higher education for students and their families?; (4) Completion: Do students make progress toward and complete their certificates and degrees in a timely manner?; (5) Benefits: What benefits does the state receive as a result of having a highly educated population?; and (6) Learning: What is known about student learning as a result of education and training beyond high school? This state report card begins by summarizing the state's performance today compared with ten years ago, and by presenting key policy questions that these results suggest for the state. Next, the state's performance in each category is described in greater detail, followed by additional contextual information. Findings for California include: (1) Over the past decade, California has made substantial improvement in preparing students to succeed in college. However, California receives only a C in preparation this year because other states performed better; (2) Over the past decade, California has improved in enrolling students in higher education. This year California receives an A in participation; (3) With many low-priced community colleges, California has provided students and families with opportunities for affordable higher education over the past decade. This year California earns a B in affordability; (4) California, over the past decade, has seen an improvement in the proportion of students earning certificates and degrees in a timely manner. This year California receives a C in completion; (5) California has seen a notable increase in benefits to the state from a more highly educated population over the past decade. That positive performance continues this year, and California earns an A in benefits; and (6) Like most states, California received an Incomplete in learning because there are no comparable data that would allow for meaningful state-by-state comparisons in learning. The Incomplete in this category highlights a gap in the ability to measure each state's educational capital--the reservoir of high-level knowledge and skills that benefit each state. [For "Measuring Up 2004: The National Report Card on Higher Education," see ED508096.]