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Not having been a student myself at MC as an undergrad, this is difficult to answer. My personal experience in college was in a scholarship hall all four years at KU, located on the edge of campus. This kept me connected to the university community just by being right there. I suspect that had I lived in the town, that connection would have been lessened.
However, I was also in a major (journalism) that required a good deal more than just coming to campus for classes. Working on the University Daily Kansan meant that most of my free time was spent in the heart of the campus anyway, so perhaps the location mattered less than the opportunity for being involved on-campus.