Regarded as a leader in industrial inventiveness and the sciences, Ger-many fears it is falling behind because foreign students are flocking elsewhere, mainly to English-speaking universities.

An Education Ministry report last year cited "alarming signs for Germany as a place of learning" and urged universities to market themselves better abroad. One barrier is that few foreigners learn German, the report said."We cannot rest on our past success," Foreign Minister Klaus Kinkel said in January. "In higher education, we urgently need to adapt to international developments, in particular to more competition."

Despite a good reputation, the German education system faces a host of problems - including overcrowding, a lack of counseling at universities, a high cost of living and budget constraints, officials say.

Last year, Education Minister Juergen Ruettgers was forced to drop a plan to charge interest on student loans after it sparked street protests by students and professors.

Germany worries it is missing out on building ties with future leaders in Asia, Latin America and Africa, links seen as vital by a country dependent on exports for much of its wealth.

"It is alarming that ever more young people from Asia choose to study in the United States, Australia or Britain despite high tuition fees," Kinkel said.