Some years ago, when fantasizing about being a billionaire, I gave thought to how I would improve upon education.
The solution I came up with was to found my own network of private schools and colleges, which I could hold to a high standard due to them being under my control.
The private schools and colleges wouldn't be free to attend, per se, but I'd make it sort-of-trivially-easy for an ambitious student to gain admittance to the private high school without paying tuition (say, the student must participate in on-campus work, organized charity volunteer work, or extracurricular research work, or simply be gifted, etc).
Exceptional students at the private schools would be given scholarships to the colleges, and billionaire-money would attract top-tier professors and researchers. I fantasized about eventually running the top private research institution in the world.
In essence, you create a brand. Use the money to create top-tier colleges under a brand name, then 'franchise' private high schools under the brand, and funnel kids from those schools to the colleges.
Punctuate the concept with aggressive job placement assistance, complimentary career counseling and even therapy for all graduates that extends for for a lifetime beyond graduation. (I think this point is a huge idea in itself, to be honest, and is something that universities should do anyway).
Being a graduate doesn't just mean you got a degree there - it means you're part of a lifetime club, a member of a 'living network' (as opposed to 'social network') with high ideals in mind. Graduates would be encouraged to serve as mentors to students in their spare time in exchange for their lifelong benefits.
Above all, this all could exist without being exclusionary toward non-'members'. For instance, tuition credits could be earned for students who agree to tutor public school students in the community and 'take them under their wing'.
Basically, in the end, you have what a real society should be - a nurturing network of educators, counselors, mentors, and just plain *people* helping each other out for their entire lives. A community, you know? Rising tide, lifting boats.
I actually think this sort of thing could be profitable, and not an expense, in the long run. Once you are established as a top-tier educator, your 'product' will become desirable and those with money will gladly pay for their child's enrollment. Build a solid reputation for producing high-quality, well-rounded, well-adjusted, successful graduates, and marry that to the benefits of being part of this fantastic 'life support group', and you've got one hell of a desirable thing, here.
In short, if you want to do something right, do it yourself. Throwing money at a flawed system isn't going to fix anything. It's like trying to fix a leaky bucket by pouring more water in it.
Slashdot-reading billionaires, feel free to run away with my ideas and do something great with them. Also feel free to contact me if you need help in the implementation. :)