Community colleges: the anchors of rural communities

Community colleges serve as anchors of rural communities. These institutions present opportunities for training, education, and community and economic development. In “Community colleges as anchor institutions in rural areas” (Federal Reserve Bank of Richmond, Econ Focus, third quarter 2023), authors Stephanie Norris, Laura Ullrich, and Sonya Ravindranath Waddell examine the roles that community colleges play in rural areas and the resources provided to these institutions. The authors focus on 66 public 2-year institutions located in rural communities in the Fifth Federal Reserve District.

The authors state that anchor institutions play a large role in their communities. They train and hire employees, purchase from local vendors, act as resource hubs, provide essential services, and help develop real estate for housing and commerce. Larger institutions, such as universities and hospitals, are understood to be anchors and drivers of economic activity, but community colleges function in the same way for rural communities.

Community colleges are more common in more populated areas, which are often also home to 4-year colleges and universities. The article notes that in rural communities, community colleges are often the only source of higher education or technical development. While providing opportunities for professional and educational advancement, these institutions also provide opportunities for employment and can be one of the top employers in their area.

Norris and company find that community colleges are often highly embedded in the region and counties that they serve. The colleges use this influence to bring projects to areas that may otherwise be forgotten. They invest in the communities that they serve, partner with local businesses, and tailor their offerings to the needs of the surrounding area. By establishing a large presence in their communities, these institutions create the visibility needed to drive enrollment, which in turn serves as a driver of revenue and funding.

Most of the community colleges in the Fifth District see tuition and funding from the state as their main revenue sources. State funding varies from college to college. The college’s location and programs offered are factors in the amount of funding from the state but, ultimately, full-time enrollment is the main driver. The authors see that, compared with 4-year universities, rural community colleges have higher levels of part-time enrollment and are often located in areas with more tax-exempt properties and declining populations. These factors contribute to the great divide in funding between community colleges and 4-year institutions.

Norris, Ullrich, and Waddell conclude that community colleges play a substantial role in rural communities. They say that given the magnitude of the role of community colleges in the regions they serve, opportunities may be being missed to support these institutions at the state and federal levels. Overall, they find that these institutions are an undervalued asset of rural communities.