At a time when the Mexican and United States governments are looking for an opportunity to diversify the bilateral agenda and strengthen the economic relationship, there is an urgent need to focus on the long term challenges of competitiveness and human capital in the region. Questions of infrastructure, standards, border procedures and energy are all crucial to this equation, but an emerging issue that has been little discussed in the public sphere is that of educational cooperation. Several experts and government officials have long recognized this as a potential growth area in the bilateral relationship, but there are now greater opportunities than ever to further develop educational collaboration. This report looks at: (1) The Educational Context in the Two Countries; (2) The challenge facing Mexico-U.S. educational exchanges; and (3) Improving the system of Mexico-U.S. student exchanges.