RECENTLY a guest column in my local, college-town newspaper raised the question: "Why do universities hire a Di Chiu for the teaching assistant job instead of a Bill Smith?" This demonstrates a basic misunderstanding of the dire straits faced by American universities.The fundamental misconception here is that a Bill Smith applied for the job, and it instead went to a foreign student. But there was no Bill Smith to consider. Parents should know that today their college son or daughter has a foreign teaching assistant or no teaching assistant and tomorrow will have a foreign-born professor or no professor. In American universities today, more than 50 percent of all faculty under 36 years old are foreign-born. By the year 2000, there will be a serious shortage of professors - of any origin - in the United States. A shortfall of 500,000 to 700,000 science and engineering professionals is predicted by one report. Unless America renews the value of education, our universities cannot continue to be world leaders, and we will provide less support and innovation for our industries when they need help the most. From a look at statistics, it seems the American university is valued by every country except America. Currently, more than 50 percent of our doctoral students in engineering are foreign. Half of these stay here and provide the fuel needed to develop American technology. Pacific Rim students have a long-standing respect for education and the work ethic. Compared to Americans, they spend 30 percent more time per year in studies: longer school days, six school days per week, 40 days off in summer instead of two-and-a-half months. Only 7 percent of our 17-year-olds have had enough science and mathematics to handle college-level science and engineering. American universities' sympathetic response to this circumstance has been to reduce classroom standards. The number of bachelor of science degrees, for example, has doubled in the past decade. While such "social promotions" serve to soothe our guilt for students' lack of earlier preparation, it damages our ability to compete in an international marketplace. In the past decade the number of doctoral degrees in engineering granted by US institutions dropped almost 50 percent. Japan, with half as many people as the US, graduates more engineers. In West Germany, 15 percent of all college degrees are in engineering; we graduate half that percentage. Yet, industry is eating its seed corn. It has pushed engineering schools to provide more graduates who have "hands-on" experience - ready for today's projects - rather than analytical thinkers who can provide new concepts tomorrow. Universities have responded poorly, training rather than educating. This has the effect of "sub-professionalizing" the engineering profession. There is no quick fix. We've run out of Band-Aid solutions in a society where instant gratification is preferred over the extended, demanding pursuits of higher education. Unlike Europe, we have no streets named after mathematicians. Instead, we name our streets after Ford, Iacocca, Rockefeller, and the big money. We've reduced the value of education to the dollars it may bring us and, indeed, many engineering deans in American universities have substituted "dollarship" for scholarship, by being more con cerned with how much research money young faculty members bring in than with the quality of their research. Students are not to blame. They are only doing what the system allows them to do, and it will take at least another generation to change parents' attitudes. Nor do politicians have an answer. Only teachers can change the system now! They can stop the spiraling decline in standards. Professors can stop blaming high schools for their classroom problems and face up to their own declining standards. They must teach a TV generation, accustomed only to verbal and visual cues, that hearing and seeing facts do not constitute knowledge. By pushing students to read more, to prepare before the lecture so that they can absorb and understand what's imparted, teachers can benefit from the advice of Goethe: "If I treat you as you are, I will make you worse. If I treat you as though you are what you are capable of becoming, I help you become that."