These are trying times for community colleges. With the economy continuing to stifle growth at four-year public colleges, enrollments at two-year institutions are up. State financial support is down. Unmet demand is growing. And every year more students show up who barely know how to read.

As if that were not enough, President Bush in his State of the Union address this year challenged community colleges to train more workers for growing industries.

The alignment of unprecedented challenges has forced the country's 1,200 community and technical colleges to engage in some uncharacteristic soul-searching: How will they pay the bills? Who will lead them? Is open access, the cornerstone of community colleges, sustainable?

"We're facing some monumental challenges right now, there's no doubt about that," says George R. Boggs, president of the American Association of Community Colleges. "One could say we are at a crossroads. The ways in which we confront some of these challenges may certainly define our institutions for years to come."

Critics who have always questioned the exhaustive list of missions of community colleges say the current conundrum will force the institutions to scale back their ambitions.

Others, though, see the pressures as a sign that two-year institutions are finally coming into their own. President Bush's rhetorical call to arms was a "landmark for us, and hopefully a signal of growing recognition for the important role that community colleges have always played in shaping this nation's economy," says Mark David Milliron, chief executive officer of the League for Innovation in the Community College.

Surging Demand

In recent years, two-year colleges have turned away legions of would-be students. Officials at California's 109 community colleges estimate that some 175,000 students could not enroll in classes this academic year. North Carolina's 58 two-year institutions estimate that last year they turned away up to 56,000 students.

Compounding that problem, particularly for low-income and minority students, is a growing segment of well-prepared high-school graduates who are showing up at community colleges' doors, driven to the more-affordable alternative by the rise in tuition and academic standards at many four-year institutions. Many older, displaced workers are drawn to retraining programs at community colleges. But the institutions also expect to see a spike in traditional-age students over the next decade, accounting for much of a projected 13-percent increase in overall college enrollments.

Additionally, two-year colleges are serving many more people through dual-enrollment programs that give college credit to high-school students. The programs have driven double-digit enrollment increases at some two-year institutions, a trend that concerned educators call a Pandora's box.

"With our failure to adequately fund our K-12 system in this country, I'm afraid that at some point down the road we'll just figure that we can't afford the last few years of high school and start dumping kids on the street when they are 16," says Gary W. Davis, executive director of the Illinois Community College Trustees Association. "When that happens, community colleges will pick them up and find ourselves faced with a whole new set of challenges."

Budget Crunch

The growth in demand wouldn't be a problem for community colleges if their budgets were growing at a commensurate pace. Some states, such as California, Florida, and Virginia, however, have forecast community-college enrollments increasing by as much as 50 percent over the next decade. And it is uncertain whether they will be able to accommodate the surge, even if the economy improves and state budgets increase.

In the 1990s, community colleges became increasingly dependent on state and local appropriations while leaders tried to keep tuition expenses flat for students. The state and local share of the colleges' operating budgets grew to 61.3 percent last year, from 56 percent in 1989-90. But in the last few years state appropriations have plummeted. Community colleges in Massachusetts and Colorado last year saw their state appropriations shrink by 13.6 percent and 10 percent, respectively. Colleges in California, Maryland, Illinois, and Missouri also experienced significant dips in state support.

Students who face those diminished educational opportunities have begun to voice their opposition. A recent student march in Sacramento to protest budget cuts drew some 15,000 students. "There's a lot of energy around here all of a sudden," says Mark Drummond, the new chancellor of the California Community Colleges, the largest two-year-college system in the country. "Student governments are much more organized. Political organizations are popping up. That wasn't happening 10 years ago."

The budget crunch has forced community colleges to close their doors, at times, to some of the neediest students. When state appropriations are slashed, community colleges cannot add enough courses to meet demand, and less-savvy students who show up late for registration find no more available classes. Some leaders point out that the first-come-first-served model favors students who are better at negotiating the higher-education bureaucracy, leaving some low-income and minority students behind.

Selectivity and elitism have long been considered anathema to community colleges. The squeeze of recent years, though, has led some leaders to question the venerable commitment to egalitarianism.

"Our commitment to access may be commendable, but it forces us to often enroll more students than the state pays for," says George B. Vaughan, a professor in the department of adult and community-college education at North Carolina State University. "When we do that, we set a dangerous precedent. Why would lawmakers give us money when we accommodate students without it?"

What worries some leaders is that community colleges are also experiencing unprecedented turnover among presidents. Some 45 percent will retire in the next four years. Many of them are grass-roots idealists who came to the field in the salad days of the '60s, inspired by a movement to bring higher education to the people.

Hard Lessons

Those soon-to-be-retired leaders worry that the new wave of presidents -- some of whom have been plucked from outside academe -- may be focused on the bottom line to the detriment of community colleges' traditional values. "My greatest concern about the turnover is that the new leadership needs to understand what community colleges are and our traditional values," says Mr. Boggs, who formerly led Palomar College, in San Marcos, Calif.

But Mr. Milliron, of the League for Innovation, concedes that the new era of community colleges may require a new breed of leaders. "It's a different time in the community-college world," he says. "And that means we need to think about the new skill sets that presidents will need."

Chief among them, many agree, will be the ability to bring in private donations, something presidents say already takes up 40 percent of their time, according to research by the League for Innovation. In the past, community colleges were supported almost wholly by states and localities, a source of revenue that is no longer ensured. Community-college leaders say a hard lesson learned from the current economic dip is the need for diversified support.

"Private fund raising was not a big push when I went into my first presidency in 1989," says Deborah M. DiCroce, president of Tidewater Community College, in Virginia. "Ten years later, diversifying the funding streams was one of the first goals we set when we did our strategic planning."

For Ms. DiCroce, that has also meant courting local business leaders and the Chamber of Commerce, and seeking outside grants to pay for some of the new facilities needed to accommodate new students. Ten years ago, Tidewater was getting about $1-million in grant support. Today, that figure is close to $15-million.

Turning to Washington

Community colleges are also looking to benefit from the federal largess that traditionally has been the domain of four-year institutions. In the last several years, nearly 20 community colleges have hired Washington lobbyists, and others are sending well-connected presidents and trustees to Washington to make the case for federal funds. It seems to have worked. Federal grants to community colleges have gone up nearly tenfold in the last several years.

Not content with those gains, community-college leaders say they hope to parlay the attention generated by President Bush's remarks in his State of the Union Address into even more federal funds.

"Community colleges have in fact altered the landscape of American higher education," says Ms. DiCroce. "The question is, where to now? And how we are going to get there?"