Germany ranks in the bottom fourth in spending on higher education in a comparison among Western industrial countries. Germany's status as a place for higher education is imperiled. There is a danger that in the near future, the very best and most promising of the upcoming generations will increasingly choose only professionally relevant training courses offered by business; turn to expensive private educational establishments (insofar as they are affordable); or turn to more attractive universities abroad. This article suggests new ways to finance higher education in Germany. A reform of the way higher education establishments operate and are organized is not realistic if approached centrally, since it would be vulnerable to excessive bureaucratic resistance. Therefore, colleges and universities need as much freedom of decision and action as possible. The strictures imposed by federal and state law, and especially civil service law, must be radically dismantled, and this must be followed by a dismantling of the bureaucracy and administrative boards in higher education establishments. Within the binding mission of "teaching" every faculty or department must be able to decide on how the funds raised from student fees are to be used. Higher education establishments should themselves choose their students and admit them only within the bounds of their financial and personal capabilities. The goal is a competition for students among higher education establishments, which will also commit professors to greater engagement in teaching. [This report was translated by Stephen D. Naron.]