1. Develop a faculty who have private sector jobs, and teach a limited number of focused hours per quarter/semester. This does several things, including decreasing the dependency of universities on federal grant dollars, and bringing in more diverse ideas and real-world experiences into the universities. Yes, we already have this with ‘adjunct’ faculty, but that's not a sufficient model. These should be ‘full’ faculty members. It would be the faculty member's choice to be either funded by grants pertaining to their academic focus, or by their private sector activities.
2. Set an absolute limit of the amount of federal grant money that can go to non-citizens. It is the tax dollars of Americans that fund these grants, and they should go to advance American science, while bringing in a smaller number of scholars from abroad who truly want to train in and be part of the American system.
3. Institute mandatory ‘exit’ testing for all universities receiving federal funding. Graduating students would be required to take an exit test which would be used as a general measure of whether or not they have obtained sufficient knowledge within their chosen field of study. The questions for these exit tests would be taken from a pool of questions solicited from private citizens working in these fields, and would not be written either by government or come from university faculty. To begin, the numbers wouldn't be presented as individual scores, but as an average from each institution - and made public - such that the ability of each institution to impart knowledge to their students would be publicly available information.
4. Make it mandatory that every university that either receives federal money, or is designated a not-for-profit, has to make publicly available their entire budget, their income (including all ‘gifts’ - including gifts of stock), their investments, the outside affiliations of the administration, faculty, and boards, and to document how every penny of ‘overhead’ money they receive from federal grants is spent. Any significant discrepancies would be grounds for cessation of federal grants to that institution.
There's plenty more, but this is a start.