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EdExplainer | How North Carolina funds community colleges

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The North Carolina state legislature funds community colleges with a formula.

Colleges receive different amounts of money depending on various factors.

By far, the biggest factor is FTE, which stands for full-time equivalent student.

Courses are grouped into tiers.

Higher tier courses are more expensive to offer and are considered higher workforce priorities.

The highest tier, Tier 1A, includes courses in automotive repair, construction, nursing, and many more.

Those courses receive $5,086 per FTE.

Each subsequent tier receives less than the tier above it — in theory, encouraging colleges to offer more courses that lead to employment.

Tier 1B courses receives $4,499 per FTE.

Tier 2 courses receives $3,912 per FTE.

Tier 3 courses receives $2,476 per FTE.

About 62% of state allocations for community colleges fund the tier-based FTE model.

But what about the rest?

37% of the state allocations go to a base allotment.

Every college receives about $2.8 million to support a basic complement of faculty and staff needed to run a college of any size.

But some colleges receive additional funds if they have multiple campuses.

Colleges receive $663,949 for smaller satellite campuses, while larger satellite campuses, for example the northeast campus of Wake Tech, receive $1,110,573.

The remaining 1% of funding is performance-based. Colleges with more successful students receive additional funding.

So how much state funding do colleges actually receive?

Wake Tech Community College, the state’s largest community college, received about $140 million this year.

Pamlico Community College, our smallest community college, received less than $6 million.

One of the biggest challenges for community colleges stems from the fact that colleges are funded based on the prior year’s enrollment.

Colleges must fund new programs for a year before receiving funding from the state, since they only receive funding after students have been enrolled in a program for at least one year.

That also means spikes in enrollment can create financial stress for colleges if more students enroll than they receive state funding for.

A new funding model for community colleges is being proposed. Stay tuned.