The phenomenon is good for U.S. balance of payments, bad for undergrads who may not be able to understand their foreign teaching assistants. But it is a testament to the quality of America’s grad schools and, arguably, a better gauge of accomplishments in science than methodologically dubious international competitions. How did America succeed? After World War II, research became centered in universities, building up a cadre of scientists second to none. The result: unparalleled educational opportunities for students fortunate enough to attend those centers–such as the California Institute of Technology.

Set at the foot of the San Gabriel Mountains in Pasadena, Caltech boasts 21 Nobel laureates among its faculty and alumni. Its labs have discovered positrons and quarks, and the nature of the chemical bond and quasars; it has pioneered the new fields of seismology, geochemistry, molecular biology and astrophysics. It is small: 275 professors and 787 undergraduates this year. Of the 1,095 grad students, 472 are foreign nationals.

Once it has attracted the best and the brightest, Caltech sets them free to pursue their dreams. “This is the most creative academic institution I’ve ever heard of,” says second-year grad-student Alan Heirich, an American. “You are encouraged to follow your muse. As a result, a very different way of thinking develops.” Creativity blossoms when students, are not constrained by academic boundaries but collaborate with researchers from different divisions. In the new Computation and Neural Systems (CNS) program, scientists from four disciplines work side by side to reproduce in computers the complicated neural systems of living things-and, maybe, create machines that move, reason and sense like humans. “Caltech was the only place that had a program to study the brain [that I could combine with] my background as an engineer,” says Ojvind Bernander, a Swede with a degree in engineering physics from Uppsala University.

“We work at night, on the weekends, seven days a week” says CNS professor Christof Koch. Corridors outside one CNS lab are lined with writing boards, lest an idea be lost for want of a place to record it. At one weekly lunch, a student showed off a machine he’d built that boasted the basic motor reflexes of an insect. These people love this stuff: the grad-student dropout rate is around 1 percent. Caltech’s size does preclude it from offering the breadth of graduate studies found at a Harvard or MIT or Stanford. But by selecting the fields in which it can excel and devoting the resources and time to their development, Caltech has come to epitomize excellence in higher education. Says Koch, “We are going places no one has gone before.” And they are taking students with them.