N.C. Community Colleges Want $100 Million to Remake Program Offerings

As state legislators streamed in and out of their Raleigh offices on a warm March day, they couldn’t miss the large white tent pitched on Halifax Mall, the green space between government buildings. Beneath the tent, students and employees from more than 20 North Carolina community colleges gathered to showcase the best programs their schools had to offer.

A Chihuahua terrier mix named Horchata eagerly greeted passersby at the table for Central Carolina Community College’s veterinary medical technology program. Representatives from Surry Community College came from the foothills to display accolades for various wines crafted through their viticulture and enology program. Carteret Community College hauled a boat built by students in a manufacturing program all the way from the coast.

The gathering, called Community College Day, is an annual event that aims to demonstrate the vital role that the colleges play in the state’s economy and the livelihoods of North Carolinians. But this year’s function was designed to be bigger and better. While the event had been held at a conference hall down the street, the front-and-center location on Halifax Mall was intended to catch lawmakers’ eyes.

The extra pomp and circumstance was part of a grander mission for the colleges this year: convincing legislators to invest nearly $100 million in a new funding formula called “Propel NC.” Rather than allocating money among the 58 community colleges based on full-time course enrollment, the new model would fund programs designed to lead to high-demand jobs in their areas.

It would fundamentally change how community colleges divvy up state dollars. The system’s leaders have called Propel NC a “first-of-its-kind” plan that would not only revolutionize community college offerings in North Carolina but also potentially serve as a nationwide model.

Community colleges arguably have more momentum than ever. As concerns about the cost of tuition and the value of a four-year degree mount, community colleges nationwide have emerged as an increasingly popular option for students right out of high school. In particular, the demand for short-term credential programs—which are cheaper, faster alternatives to traditional bachelor’s or associate degrees—has skyrocketed among young people in recent years.

Propel NC could position community colleges to capitalize on that trend, boosting their financial positions and the state’s economy. Still, there is a dearth of data on the long-term payoff. And while North Carolina community colleges benefit from broad, bipartisan support, they are not insulated from state-level budget pressures or the national politics engulfing higher education, including federal funding uncertainties.  

Around two dozen community college representatives, legislators, business leaders, and outside experts told The Assembly that they were optimistic that the system would get the support it needs to launch Propel NC and execute an innovative vision.

“I think our day has arrived,” said Jeffrey Cox, the president of the North Carolina Community Colleges System. “The community college system—and community colleges broadly—are finally kind of stepping out of the shadows to say, ‘We are not a second-rate alternative. We’re the first, smart choice for hundreds of thousands of students.’”

“We want to be the first choice in higher education for almost all of North Carolina,” he added, “and I think we’re moving in that direction.”

‘It Needed to be Changed’

Just a few years ago, the community college system was in a much different place. 

Enrollment fell sharply amid the COVID-19 pandemic, following a 27 percent drop over the previous decade. As The Assembly reported in 2022, leadership challenges and high turnover also dogged the system and prompted questions about its future. Shortly after The Assembly’s report, the system’s president was ousted by the state board.

When Cox, then president of Wilkes Community College, took over the position in 2023, he knew that he had some work to do. The state board had established a strategic plan to get back on track, and they looked to Cox to execute it.

By Cox’s side was Tom Looney, a retired IT executive with infectious salesman-esque energy who, around the same time, became chairman of the state board, the system’s policy-making arm. He is a fan of superlative-oriented goals, perhaps best captured by his successful lobbying to change the system’s longtime slogan of the “Great 58”—for the number of colleges in the system—to the “Extraordinary 58.”

Under Cox and Looney, enrollment is up 16 percent since fall 2020, and the job vacancy rate is down to 6 percent from around 20 percent two years ago. But another big item remains at the top of the duo’s to-do list: a new funding mechanism.

By 2031, North Carolina is projected to have more than 570,000 annual job openings, with anticipated shortages in sectors like healthcare and manufacturing. More than two-thirds of those openings will require some kind of post-secondary credential.

The state gives the community college system a pot of money based on a formula, which it then divides among the 58 institutions. For the past decade, full-time equivalent enrollment—a budgeting metric that says one “full-time” student equates to 512 instructional hours—has been the biggest factor in determining state funding for community colleges.

Colleges receive more state dollars based on the number of students enrolled in courses that count toward degree programs and some other continuing education courses in high-demand fields. Programs that cost more to run also receive more money per student. The formula, which includes some performance and institutional support allocations as well, determines about 75 percent of state funding to the system, totaling about $1.65 billion of their $2.2 billion state allotment in the 2024-25 fiscal year.

But degree-granting programs don’t necessarily match what is most in demand. In fall 2024, one-third of community college students were only enrolled in workforce-focused classes that weren’t linked to a degree program. Those courses attract more part-time students, so they receive fewer dollars under the current model. Additionally, the part of the formula that allocates more funding for more expensive courses isn’t necessarily aligned with workforce needs.

“Everybody complained about it [the formula] across the system,” said Dale McInnis, who served as the president of Richmond Community College until last fall. “There was unanimous belief that it needed to be changed.”

McInnis, it turned out, would come up with the blueprint to fix it. He proposed a new formula that awards more money to programs based on labor market demands, as determined by statewide and county-level job analyses. McInnis also suggested that the formula should value courses that count toward degrees at the same level as other classes, incentivizing colleges to launch more short-term, workforce-focused credential programs.

“It levels the playing field so that college isn’t making decisions based on which format is going to bring us the most reimbursement of revenue and force a degree … on a student,” McInnis said. “What it’s going to do is recognize the local labor market values and align our programs with local employers.”

Unlike traditional, accredited associate or bachelor’s degrees, short-term credentials are gained through alternative programs focused on quickly building specialized skills—usually in a year or less—with the goal of getting students into the workforce faster. For example, many students enroll in such programs for certified nursing assistant and emergency medical technician positions. More students are now turning toward fast-track programs in a wider variety of fields and trades.

A recent report by the education nonprofit National Student Clearinghouse found that, nationally, the number of short-term credentials granted reached a 10-year high for the third consecutive year, while associate and bachelor’s degrees declined for the third straight year. Short-term credential programs are also responsible for the increase in the total number of credentials granted for the first time in three years. In another first this year, the number of 18- to 24-year-olds seeking short-term credentials surpassed older age groups.

In North Carolina, more than 40 percent of all credentials granted last academic year were short-term program certificates. The number of certificates granted increased by 23 percent, compared with a 1 percent increase in associate degrees.

The community college presidents’ association unanimously approved Propel NC in late 2023. The policy-making state board’s endorsement quickly followed in early 2024. Since then, more than 200 businesses and industry leaders have expressed support for Propel NC.

“They look at this and, as we do, just realize that this is something that’s long overdue,” said John Loyack, the system’s vice president of economic development. “Businesses are in full agreement because they look at that list of the priority occupations that we’re talking about that matches exactly what they need.”

Unstandardized Test

While more than 30 states have invested billions of dollars in short-term credential programs, Propel NC stands out.

Most state-led initiatives surrounding short-term credentials focus on providing financial aid to students, said Maria Cormier, a senior research associate at Columbia University’s Community College Research Center. Propel NC would provide funding for colleges to develop new short-term programs by equally funding degree-granting and nondegree programs. 

A handful of states, such as Texas, have adjusted their funding models to better account for short-term programs, but Cormier said she has not seen any other state-level approach quite like Propel NC. “It is intriguing, and it’s a fairly distinct model,” Cormier said. “I think, ultimately, they are trying to shift this approach to how colleges deliver short-term training.”

Robert Kelchen, a higher education professor at the University of Tennessee, said Propel NC addresses a budgeting challenge that has daunted two-year colleges for decades. While nondegree programs are a big part of colleges’ offerings, he said they don’t get equally recognized in funding models.

For example, Laura Leatherwood, the president of Blue Ridge Community College in Henderson County, said that based on the projected workforce needs in her area, her college would receive an additional $1.6 million if Propel NC receives full funding. She could expand short-term electrical engineering and plumbing programs and other high-demand programs. The area already needs those trades, which only intensified following Hurricane Helene, but it often takes years to build up enough student enrollment to break even under the current funding formula.

Still, despite the heightened demand for short-term credentials, the landscape contains a lot of unknowns. 

While the lifetime economic returns of bachelor’s and associate degrees have long been studied, there is much less data available on the long-term value of a short-term credential. Some offer a clear return on investment, such as those in the healthcare sector, but it is difficult for researchers to pinpoint the payoff of many short-term credentials because the programs are unstandardized and highly variable.

“We don’t have a lot of evidence on noncredit, nondegree certificates and credentials,” said Michelle Van Noy, the director of Rutgers University’s Education and Employment Research Center. “There’s still a need to just better understand the implementation of the outcomes of some of these things.”

It also remains unclear whether students can build sustainable careers from short-term credentials. One commonly cited feature of short-term programs is that the credentials are “stackable,” meaning they provide the first step toward additional credentials that lead to higher wages. However, Van Noy said few institutions have invested enough in support services and advising to determine how to help students navigate that process.

Cox, the system president, says community colleges are implementing changes to better support students in nondegree programs. With the rapid pace of technological change today, he said students and employers will need to continually “upskill” and “reskill”—and community colleges are best suited to serve as the starting point and developer of that pipeline.

“We want to be that continuous, lifelong education partner for students and for workers out in the economy,” Cox said.

Right Direction, Turbulent Timing

At a March hearing for the House and Senate joint education appropriations committee, state legislators on both sides of the aisle praised Propel NC and the community colleges.

Before Cox even began his pitch, Republican Sen. Brad Overcash of Gaston County gushed over the system’s leadership: “I will just say, by way of introduction, that Chairman Tom Looney and his board and President Jeff Cox and his staff have brought a surge of energy to the community college system.”

Following Cox’s presentation, legislators had few questions. “The direction you’re going is exactly what we want done,” said GOP then-Sen. Paul Newton of Cabarrus County. Cox briefly interjected: “We’ve been listening, Senator,” prompting chuckles around the room.

It’s not surprising that Propel NC and the community colleges have such strong legislative support. Public confidence in community colleges is higher than for four-year universities, which have struggled with their image amid rising tuition and heightened attention on student debt. Community colleges, on the other hand, have long been seen as focused on workforce development, and they have done a better job of communicating that mission than universities, which must juggle research and campus life, as well as other political pressures.

“Community colleges right now are the best-positioned sector in higher education,” said Kelchen, the University of Tennessee professor. “They prepare students for pretty clear labor market needs, the graduates stay close to home, and it’s affordable.”

Two bipartisan bills in the House propose nearly $100 million for Propel NC. Although the governor’s budget and the Senate’s budget don’t fully fund the new model, both budgets cover about half of Propel NC’s request to rework the formula to align with workforce sectors. The governor's budget also proposes around $34.5 million to provide free community college to students pursuing credentials in high-demand industries, including the expansion of short-term credential programs.

While it will likely take a few months for the House and Senate to finalize the budget, it seems less like a question of when, but how much money Propel NC will receive. But they are competing for money with many other state priorities, as Republicans also seek to cut taxes. 

A few Democratic legislators told The Assembly that they worried about the need to put money toward Hurricane Helene relief and a projected state budget deficit. In the Senate’s recently passed budget, legislators instructed the community college system to cut 9.9 percent of their institutional and academic support budget through administrative cost reductions, resulting in a $57 million cut for its 2026-27 allocation.

Although President Trump’s ire has focused on four-year universities, shaking up the Department of Education could still affect community colleges. For example, glitches in federal financial aid processing due to staffing cuts have already begun to emerge.

Additionally, the Department of Labor funds 65 percent of the state’s apprenticeship program, ApprenticeshipNC, via federal grants. Currently, there are no proposed state budget provisions to account for any potential federal funding hits to the apprenticeship program.

Chris Harrington, the director of ApprenticeshipNC, said the program was already looking to rely less on federal grant money. Now, there’s an increased sense of urgency. “We don’t know what federal funds will be out there a year from now, two years from now,” Harrington said. “So as a state, if we really want to support apprenticeship, we need to fund it.”

Sen. Jay Chaudhuri, a Democrat representing Wake County, said the state might struggle to fill gaps left by federal funding cuts. “That’s creating additional pressure for us to try to put dollars towards a program that ought to be picked up by the federal government,” Chaudhuri said.

Cox told The Assembly that the system is “concerned about any potential reduction in support” for apprenticeships, and he hopes the state legislature will fill any gaps. “We’d love to see funding included for apprenticeships in the final budget,” he said. “We think it’s a really high priority, and we’ll be doing a disservice to North Carolinians if we don’t fund that well.”

Trump has also targeted diversity, equity, and inclusion efforts at colleges in executive orders, prompting some community colleges to make changes. At the state level, Republican legislators have included community colleges alongside the University of North Carolina System in a bill that would end DEI efforts. The Senate’s budget also eliminates the Minority Male Success Initiative, a 20-year-old program designed to provide additional student support for minority male students.

The community college system said it does not comment on specific legislation, but Cox told The Assembly that the system is monitoring state and federal policy changes.

“Obviously, we’re going to be compliant with the federal policy, but also we are going to continue to take care of our most vulnerable students and those who need us the most,” Cox said.

The state board voted in early April to change the name of the Minority Male Success Initiative to the Student Success Initiative and broadened its scope to serve “underachieving students.” It’s unclear whether the program under the new name would continue if the legislature follows the Senate’s plan to cut its $81o,000 appropriation.

Despite some state and federal uncertainties, community college leaders say there may be opportunities with Trump in office and Republicans in power. Both Cox and Looney, the chair of the state board, pointed to growing support for short-term Pell grants. The expansion of Pell grants, the federal government’s signature need-based financial aid program, to cover more short-term programs would benefit the kind of credentials that Propel NC aims to create.

With political turmoil and cuts circling the higher education sector, Looney said community colleges must “double down” and promote their mission. 

“I want us on every billboard, every news agency, The Wall Street Journal to say: North Carolina is the No. 1 place to do business, and the reason is, it's got the No. 1 community college system in the country,” said Looney.

He added: “Nobody outsells me.”

Erin Gretzinger is a higher education reporter at The Assembly. She was previously a reporting fellow at The Chronicle of Higher Education and is a graduate of the University of Wisconsin at Madison. You can reach her at erin@theassemblync.com.