Why has the time spent studying declined so sharply in the United States over the the past few decades?
First, it is important to deploy your scientific skepticism in assessing this claim.  The source, after all, is the American Enterprise Institute, which is a political "think tank" that is explicitly dedicated to pushing a particular point of view.  Other key elements of its scientific record including taking tobacco company money to produce pro-smoking studies the 1980s and recent attacks on global warming.  

There does, however, seem to be at least some difference there, and a deeper analysis of both the data and possible causes found that a major transition happened across the 1970s:


Expansion of the student population to include many more people who are working to support themselves, parenting, commuting long distances, etc., which means they cannot devote as much time, and
A shift in faculty requirements away from teaching and toward research, with a concomitant decrease in the amount of work that faculty are able to support asking from students.


From the early 1980s to today, however, the situation appears to have been more stable.