Rural America contributes greatly to the American Community, yet this population is often overlooked and underrepresented in most types of education literature. Choices about residence shape America’s public school system through the formation of school districts and schools associated with these local jurisdictions. Communities with different population densities may have different overall population composition and, therefore, may sort differently into schools. This paper examines the effect that population density, local jurisdictional sorting, homogeneity, peer characteristics, and community social capital may have on student achievement. The first part of this dissertation outlines the importance of rural research and the impact of rural education on all of America. These areas have different economies, opportunities, and peer composition than their non-rural counterparts. The statistically average person is different in rural and urban America. The second part discusses the theoretical implications of locale influence on educational attainment. This theory explains the possible causes of peer effect strength and provides a better predictive model of both rural and urban peer effects. I argue that some level of heterogeneity and high social capital foster strong peer effects, and there is a tradeoff between diverse student body composition and social capital. In the final portion of this dissertation, I explore student achievement using empirical analysis. Based on the analysis in Chapter 4, it appears that student achievement is impacted by peers with and without controlling for teacher effects and social capital (or type) of a locale without controlling for teacher effects. Chapter 5 examines peer effect differences by locale and finds differences in peer effect strength. Suburbs have significantly stronger classroom mean peer effects in elementary school than towns. Skewness influences appear to be the same across grades and locale, and social capital has a positive impact on student achievement in elementary school and a negative impact on student achievement in middle school. The analyses in Chapter 6 conclude that student achievement is impacted by both the average and the percentage of high and low achievers but not similarly by locale. The final chapter discusses the results and their implications for future research and for policy makers.