University reform

It would be interesting to share some thoughts on the need to reform European university systems. After all, some of the best European law and economics professors, e.g. Gerrit de Geest, Nuno Garoupa, and Franscesco Parisi, not to mention Bebchuk or Hart, are now working in the States. The question, to my mind, is what should be done to reform the European systems.
My view is that we need to address three issues: First, state funding is not going to increase much over time, due to the demographic strains on the public budget. Hence, it is important that students pay part of the cost of college, if not from the first year than at the graduate level.
Second, the idea that a certain fraction of a generation should go to college is misguided. In Denmark, that policy is implemented by paying universities per student who passes exams; a recipe for a lowering of academic standards. Some of our students should not have been allowed in; they learn very little, and would most likely be better off in a different and less abstract teaching environment. They are also a strain on the system. Third, we should think carefully about how we can ensure competition among universities in attracting students and professors.
I realize that reforms have been implemented in parts of Europe. In Denmark, the taboo about letting students pay is very strong; it is considered a vital part of the welfare state that students not pay, to ensure equal opportunity. (However, most students are from well-to-do families, and one could set up a system of stipends for the gifted students from poor families).
In my view, addressing this taboo is vital; a Coasian bargain should be struck between the prospective student and the talented people who might or might not choose to become university professors (and who, increasingly, choose the latter, or choose to go abroad).

It would be interesting to hear about experiences from other countries.