The institutions, which are increasingly seen by employers as a critical source of skilled talent, would get a $10 billion shot in the arm as part of a bill that overhauls the way student loans are administered.

Under the Student Aid and Fiscal Responsibility Act, which the House approved 253-171 on Thursday, September 17, all student lending would be done directly by the government.

Proponents say the changes will make college more affordable while saving tax dollars that would otherwise wind up as bank profits. Financial institutions are resisting the elimination of their role in originating education loans.

While the thrust of the bill could cause tension between Congress and business, the community college dimension is being embraced by both sides.

The measure includes $10 billion for President Barack Obama’s American Graduation Initiative, a program designed to help community colleges improve their facilities and expand online education.

When he introduced his $12 billion, 10-year proposal this summer, Obama asserted that it would enable an additional 5 million people to earn degrees and certificates from community colleges, a down payment on his effort to ensure that by 2020 the United States has the highest proportion of college graduates in the world.

The Business Roundtable sent a letter to House Education and Labor Committee Chairman George Miller, D-California, praising him for including the Obama initiative in the bill.

The group, an association of chief executives of some of the largest U.S. companies, says that community colleges are a key source of training for people who are leaving one industry, such as automobiles, and entering another one, such as health care.

“We’re at a critical juncture in terms of needing to retool the U.S. workforce,” said Susan Traiman, director of public policy at the Business Roundtable. “With the dramatic changes in our economy, more and more workers are going to have to seek new jobs and new careers.”

Now that the recession is decreasing labor mobility, those who are out of work need a place to turn to for training that is close to home and nimble enough to adjust curricula to meet the needs of the local economy, according to Traiman.

House Democratic leaders said the bill is a key component in Obama’s effort to make the U.S. more economically competitive through upgrading its workforce.

“This is about building a job base, about building a talent base,” Miller said at a Capitol Hill news conference this week.

Most House Republicans opposed the bill because they view it as a huge expansion of government. But they support community college involvement in the federal training system, according to Alexa Marrero, spokeswoman for the House Education and Labor Committee Republicans.

“We believe much [of the bill] is duplicative of current programs,” Marrero said. “Rather than creating a whole host of new entitlement spending, Congress should focus on extending, renewing and improving the programs that we have that already work well.”

The debate will continue on the Senate side. Miller said he expects the Senate education committee to act by the end of September.

In the meantime, the business community will advocate for strengthening community colleges.

“It’s the skills and the credential,” Traiman said.

—Mark Schoeff Jr.

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