The United States has an education deficit that in the long term may be more harmful to the country than the serious budget and trade deficits. U.S. students are far less prepared in mathematics, chemistry, and physics than are their counterparts in Western Europe and Japan. The dropout rate among high school students, and the high and increasing rate of functional illiteracy, blight lives and represent an enormous economic loss to the nation. American education must be restructured at all levels so that local and federal funds can be used flexibly to pursue revised educational goals. Students and their families should be allowed to choose their elementary and secondary schools, and school management should be decentralized and more rooted in the community. The medical profession must become involved in elementary and secondary education, and medical faculty must be involved in their communities. Further, medical faculty must encourage minority students at all educational levels, must recruit minority medical students, and must increase the number of minority faculty members. © 1990 Association of American Medical Colleges.