DURHAM — President Barack Obama wants to spend $12 billion to invest in the nation's community colleges, increasing the number of graduates of the two-year schools by 5 million over the next dozen years.

Durham Technical Community College President Bill Ingram is delighted.

Obama's proposal, made during a speech at a community college Tuesday in Warren, Mich,, is "an indication that the administration understands the vital role community colleges play in access to higher education and in local, regional and national economic and work force development efforts," said Ingram.

Obama's American Graduation Initiative includes $2.5 billion for construction and renovation at the nation's community colleges, $500 million to develop new online courses and $9 billion for "challenge grants" aimed at spurring innovation at the colleges.

According to Obama administration officials, the grants will require colleges to compete by designing innovative new programs or revamping their existing curricula.

Ingram said Durham Tech is "certainly interested" in the competitive grant process for program development and improvement, but "we are less clear about the loan program for facilities and infrastructure."

That program would require taking on debt and the Durham Tech leader noted that his school currently does not carry any debt and "I'm not certain that our board of trustees is permitted to carry debt."

Administration officials said the construction money would be used to kick off capital fundraising campaigns at colleges or similar efforts, sparking billions more to repair aging and dilapidated buildings.

The money for new online courses would be used to develop Internet-based lessons that could be used by schools all over the country to reach more students. The government would use the money to recruit educators to develop the courses, but would require that the courses be free and in the public domain for anyone to use.

Ingram noted that it's not clear at this point how much of the funding Obama proposed would be available directly to colleges, how much would come through the state and what the application process would be.

And, he said, "Congressional approval is necessary and any legislative process takes time."

Administration officials said the proposed funding for community colleges would be included in the budget bills that Congress considers during the next several months and, if approved, would begin being spent during the first half of 2010.

No matter how long it takes for the money to begin flowing, Ingram said, "we're delighted that President Obama has recognized community colleges as central to our national's educational system."

The Associated Press contributed to this report.