For example, the California State University system recently announced it would not be able to matriculate an estimated 16, 000 students this spring because of costs.

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The separate California State University system, which is facing its own financial nightmares, recently canceled some days of instruction in order to put professors and other staff members on furlough.

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California State University System exempting students from non-resident fees.

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Udacity also is working with the California state university system on challenges such as the large numbers of students who need to retake classes they have flunked, in order to meet graduation requirements.

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This Alliance has resulted in development of partnerships with the University of California at Berkeley and Davis, the California State University System, the regional California Community Colleges, and Midwest universities such as University of Oklahoma.

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The California State University System declined to take the vast majority of transfer students this spring and has turned away about 20, 000 students who qualified for admission during each of the past three years, a spokesman said.

WSJ: Public-University Costs Soar