I'm no expert on American colleges and universities (I'll call them both colleges), even though I've either been attending one of them or teaching at one of them (or both) since the Fall of 1971--except for a total of 3 semesters teaching in Germany and Sweden. Anyway I'd call my observations informed, to a degree, but still casual.
What American college have had and still have going for them: There are a lot of them. Also, in most cases, they allow for late-bloomers in a way European higher education (for example) doesn't. Some students get the hang of things intellectual and academic later in high school or even in their second year of college. The American system accommodates them.
The system also allows for people who, for one good reason or another, simply have to go to college later in their lives. The GI Bill alone stands as a shining example of this.
How American colleges are currently in trouble:
Well, a lot of them are broke, or at least facing tough economic times. And America itself is deeply conflicted about how much (and how) it wants to support higher education. The California community-college and university system used to be the product of a society that was unconflicted about higher education. One could go to a community college and transfer to the UC system, or go directly to the UC system, and get a first class education for very little money. And society, not just the students, was better for it, in my opinion.
Now, across the board, from public universities to private colleges, students are graduating with way too much debt. Because consumers drive the economy, and because such students are spending money on paying off loans (spending it "the past," as it were), they're not spending it on goods and services.
I think the system still does not do as well as it could with ethnic minorities.
I think state universities, especially the "research" ones, have to depend too much on outside grants. At some universities, professors have to raise 50% or 60% per cent of their salaries through grants. This situation has to have an effect on what they research and perhaps even on how they construct their results. I also think that teaching at the undergraduate level at a lot of state colleges is pretty bad--because of class-sizes but also because some t.a.'s and graduate assistants aren't well trained.
Liberal arts colleges are in trouble because their endowments are in trouble. Also, they've gotten by hoping no one will notice a blatant contradiction: All of the claim to offer a (more or less) "traditional liberal arts curriculum," and all of them claim simultaneously to be "distinctive" (from one another). Well, one wants to ask, which is it?
Such colleges also remain very white and very upper middle-class, although some are doing better on the class side of things. Also, these colleges fall into some fallacious either/or thinking: Either you can offer a liberal arts education or you an offer an education that has some sharp focus on employment after college. At a lot of such colleges, any particular focus on employment--except at the "career center"--is consider vocational, which in turn is considered a pejorative term.
Community colleges continue to be the hero in our story, except of course they're now asked to do way too much with way too few resources.
I think almost all American colleges find themselves in an identity-crisis, and most of them are in denial about it. Liberal arts colleges need cash flow because they're so expensive to attend, so, under the guise of connecting the classroom to the living-situation, they may require students to live on campus beyond the freshman year, sometimes all the way through the four years. As an astute student said to me, "It's a control issue." It's also a money issue. Students on campus pay rent directly to the college and buy a lot of food on campus. Under the guise of one identity, then, the college is actually and merely focusing on cash-flow. I wonder how many students and parent see through the disguise immediately.
Meanwhile, big state colleges have to rely on semi-pro athletic programs to generate money, and on sports-crazed alumni to give money--with the attendant problems of "boosters" violating rules and students & coaches unconcerned about education. I think big state (research) colleges have to depend too much on large corporations, too--to drive the research, which brings in the grants.
Just think if only a fraction of the money spent on recent wars had been spent on higher education. Then think more broadly of how America perceives its higher education--and its public schools. A society deeply divided about the worth of education and the value of spending money on education is a society in trouble. In my opinion.