To renew America's status as the world's leader in college attainment, the federal government needs to transform America's community colleges and equip them for the 21st century. This long-overdue investment should establish national goals and a related performance measurement system; provide resources to drive college performance toward those goals; stimulate greater innovation in community college policies and practices to enhance the quality of sub-baccalaureate education; and support data systems to track student and institutional progress and performance. This paper proposes a federal policy agenda to both provide needed support for the community college sector, and improve its performance in graduating students with meaningful credentials holding labor market value. After an initial section outlining evidence on economic and societal trends in higher educational attainment, the paper explores the importance of community colleges for increasing national prosperity, as well as the obstacles they face in making that contribution. The paper demonstrates that despite these national aspirations, the federal government currently plays a very limited role in ensuring their success. It concludes by summarizing a four-part federal policy agenda to significantly transform the potential of community colleges nationwide to help their students, and thus our society, achieve greater prosperity. (Contains 1 figure, 2 boxes, and 78 notes.)