Letter of Thomas Jefferson to Joseph Cabell, September 9, 1817, reprinted in Writings of Thomas Jefferson (Memorial Edition 1904) volume 17, page 423.
Compulsory school attendance seems like a different question, and more like an implementation detail to me. At least today school attendance is not compulsory if the parents arrange for the child to be educated up to the currently mandated educational standards. (i.e. Homeschooling is legal.)
(It might be possible to do a comparative study of countries/cultures which have codified educational requirements vs. ones that don't-- comparing basic literacy rates to get some insight into this in the general case. It could be very tricky to factor out economics though. I know what I suspect the results would indicate. But I've not the time to do the study.)
Singapore is a good example in this regard. Its compulsory school attendance law is still less than two decades old.
Wide spread college attendance is really only in the 2nd half of the 20th century.
I also believe America's success came from its freedom (and perhaps more so just the idea of freedom), and the culture and attitude (optimism, can do anything attitude) that resulted from that, that made it such a successful country.
Not to mention they stole tons of technology from Europe, and didn't get ravaged in WW2.
In my opinion, what has led to the "downfall" of America, is about 10-15 years of, in my opinion, decidedly unstrategic thinking on the part of manufacturers, specifically hi tech. In many cases, the technology that took generations to develop has essentially been given to the cheap labor manufacturers (China)....this was one of America's most strategic advantages, and they no longer have it.
You could argue that but it is wrong (well, at least the education-specific bit). Mandatory education in America traces back to the culture (in general) and the enacted legislation (in particular) of the Puritan settlers of New England. The Puritans believed in universal literacy so that everyone could read scripture. They passed laws mandating child literacy and required towns to hire teachers to teach the children. This was all mandated and required by the government and in some sense that can be construed taking choice AWAY from individuals rather than giving choice to them. At the time this system and these requirements were unique in the world.
http://en.wikipedia.org/wiki/Puritan#Education