Nonetheless, the research budgets of the Department of Defense are under enormous stress-and they are extremely important because they support more than 40 percent of all federal funding for engineering schools across the country. So the threat was and is real.

We are trying to make up these other elements by gaining cost efficiencies through our reengineering process and through overt fund-raising activities to better support graduate education.

America faces many challenges...but the enemy I fear most is complacency. We are about to be hit by the full force of global competition. If we continue to ignore the obvious task at hand while others beat us at our own game, our children and grandchildren will pay the price. We must now establish a sense of urgency.

The Science Coalition, which grew out of an initial concept at Harvard and at MIT, has now grown to an informal group of about 60 research universities.

Looking ahead, I believe that the underlying importance of higher education, of science, of technology, of research and scholarship to our quality of life, to the strength of our economy, to our security in many dimensions will continue to be the most important message.

I would also certainly continue to keep loan repayment interest rates as low as possible. And I would spread the financial aid a little less thinly across all income brackets.

The thing that we at MIT must understand is the amount of real damage that is being done to us in the fine structure of how research funds are expended.