Heino Beckmann, a German finance professor, recalls his student days during the early 1960s in Berlin very fondly. "You were in charge of your own studies, with little direction," he says. "It was a wonderful time of exploration. You read whatever you wanted." When he came to the United States later, he was surprised and a little shocked at the extent to which students were guided. "I couldn't read what I wanted to read but rather what the professor wanted me to read. I must confess, I had liked being in charge of my studies."

What Beckmann remembers so nostalgically, he realizes now, was an educational world that was on the verge of being drastically changed, almost beyond recognition. Originally conceived in the early 19th century by the Prussian statesman, philosopher, and linguist Wilhelm von Humboldt (brother of the famous explorer and natural scientist, Alexander), Germany's universities were designed to train members of an ultra-elite cadre to become teaching researchers.

Despite a professorial style that was somewhat authoritarian and pompous, the system generally was collegial, informal, and open. Anybody who had obtained a diploma from one of the selective Gymnasiums, or high schools, was entitled to study anywhere in the country; fees were minimal; and students were treated as adults from the first day. Only a small fraction of Gymnasium graduates opted for university study, generally those who felt (and were deemed) most suited for the life of the mind.

At the university level, it was assumed that the gentleman-student would be able to craft his own educational plan, and perhaps partly because of the country's legendary industriousness and discipline, the system worked. By the end of the 19th century, Humboldt's university was the model for the best research universities everywhere, having come to excel at everything from historical studies to the physical sciences and engineering. Through the 1920s, the most promising science and engineering students flocked to Germany from all over the world to sit at the feet of masters.

Those were the good old days. A democratic opening up of Germany's educational system in the 1960s, and a growing demand for higher education from an increasingly prosperous and successful middle class, led to an enormous increase in the student population. Today, Beckmann says, more than a third of German high school graduates attend university, whereas in the early 1960s the proportion was barely 4 percent.

That would have been all well and good if the university system had changed to meet new needs. But it didn't adapt much. Already in the early 1970s, young people coming from the United States to study in Germany were startled and disoriented by the remoteness of the faculty and what seemed a complete absence of campus life. What had seemed to Beckmann a nirvana of intellectual freedom felt to them like being lost [see photo, "Crowded"].

When Beckmann took leave from a liberal arts college in Minnesota a few years ago to teach at the University of Applied Sciences, in Trier, he found that when he taught using U.S. methods, the students loved it. "I didn't lecture but rather engaged them." Beckmann realized that the students wanted and needed some structure—a lesson that's now dawning on Germany's political leadership as well.

The foundations of electronics and physics were laid primarily by scientists educated in Germany. Planck and Röntgen, Helmholtz and Hertz, Heisenberg and Schrödinger, Ohm and Einstein—all came up through the ranks of the system that Humboldt inaugurated with the establishment of the University of Berlin in 1810. And at least superficially, there are still a lot of things about a German education that look enticing, starting with the fact that it remains mostly free of charge.

Yet, for anybody accustomed to thinking of German education as the essence of hard-working excellence, today's numbers are tough to face. The problems start, it seems, as soon as children enter school. According to surveys issued by the Organization for Economic Cooperation and Development (OECD), Paris, Germany's pupils, compared to those in other industrial countries, score below average in reading, math, and science. One reason: the average German pupil now spends 160 fewer hours per year in class than the average OECD schoolchild.

Overall, the fraction of its domestic product that Germany spends on education at all levels is smaller than the OECD average, which is5.6 percent, and far smaller than that in countries like the United States and South Korea, where it is 7.3 percent and 8.2 percent, respectively.

No wonder, then, that students no longer flock to Germany for the privilege of sitting in classes with graduates of its high-school system to study under professors trained in it. The universities themselves, once small, few in number, and uniformly excellent, now are often like gigantic U.S. state universities and vary enormously in quality. It's not so easy for the foreigner to figure out what schools are best or most suitable.