this is a good and bad problem to have, according to william nance, vice president of student affairs at san jose state. >> it's a good thing in that we're a destination campus, that people see the value, see the quality of the education that we provide. the downside is that means not everybody can come. >> reporter: the university is changing its long-standing policy from the local area guarantee to a local area preference, making requirements stricter, starting in the 2013 to 2014 year. >> the system no longer admits, can no longer admit all of the csu-eligible local students. this is a situation that has caused by the failure of our elected officials in sacramento to adequately fund the csu in general and san jose state specifically. >> reporter: this is the best option right now, according to sjsu public information officer pat terrace. in order to combat the continuing budget crisis that is plaguing all of csu campuses. >> when state support drops in the area of, say, 700 million, there are few things we can do to make up for that and to ensure that our existing students have cla