One thing I liked in a previous campaign is the use of training time and cost for leveling. It adds a bit of realism (LoL) to the idea of leveling, while helping with inflation and aging of characters.  No more infinitely rich 18 year old 20th level barbarians.  In that campaign you could earn up to mid point of your next level before you had to train to keep gaining xp.  Also, it cost 1k gold per level for training so level 2 required 2k gold, level 3 3k, etc. and it took a week of training per level also.

I think if there is a worry about level balance, you could incorporate training with time and cost being greater for races other than humans.  Want to level beyond what "rules" say you can no problem it just costs you twice as much in time and gold to find someone to do so.  Want to train outside the classes allowed to you, that is fine also just means it is 3 times the cost.

I think by doing this you get into the long term vs short term pros and cons of being human or being non-human.   
                

                
Jason!  It's good to hear from you again.  Thank you for contributing.  There are a couple of points in your response that I'd like to address.

First is the idea of training to level.  In my heart of hearts I know that it takes more than experience to advance in skill.  Experience is only part of the picture.  You need to train, too.  Also, I know that if you don't continue to practice you will lose skill.  Witness my once mad Kung Fu skills now reduced to little more than knowing how to punch and the possibility of escaping a headlock.  I might be able to leg-jam a wild kick, but I'm badly out-of-practice and out-of-shape.  I think that a Magic User who stopped memorizing and casting spells for a couple of years would find himself unable to memorize and cast his high-level spells without hitting the books again for a good while.

The problem with this is that I've never found training rules which worked nicely alongside the AD&D leveling model.  Most come off as a money-sink and an unfair penalty to success.  As a DM, I like the idea of a character coming back from an adventure lean, mean and rich, with a body and mind ready learn new fighting techniques or new spell memorization and casting techniques.  They would then either seek out their old master or some other willing teacher and spend some amount of time with them after which they would emerge with an improved skill set.  This smells like reality to me.  In my academic career, my professional career and my (limited) martial arts career, this seemed to be how it worked.  I worked hard for a long period, took additional classes along the way and continually increasing my capacity to learn, or produce or fight.

As a player, I find the idea of seeking out a master and paying her or him an obscene amount of money to justify my transformation from 1st to 2nd level unfair.  I mean, I killed a bunch of orcs and goblins, right?  I hauled away a small fortune in gold and silver.  Why they hell do I have to train, too?  And why does it cost so much?

The second point, and related to the first, is the idea that a demi-human or half-human should be required to pay more and take more time to train after a seemingly arbitrary point.  From a metagame view I like this because it sharply slows the level progression of demis and halfs when they decide to exceed their Player's Handbook limits, which sort of stays faithful to the model without totally destroying it.  It's not going to slow their acquisition of experience, though, and I have a feeling that the monetary cost is not going to slow the leveling down much.

You've given me some good ideas to bat around.  I'll try to post a follow-up on this in the coming days.

Also, I looked up Half-Orcs and according the Player's Handbook, they are limited to a maximum of 18/75 for strength.  That's out, too.  I think a Half-Orc should be allowed a "natural" maximum of 19 strength.
                

                The cost aspect was explained in some metagame terms that it is not that you are handing over the 1k of gold to some master in a sack.  But rather it is the cost for room, board, travelling, practice equipment or components, and healing required to get you back up and going again after the spell went wrong or that blow was a little too hard.

As for the why, it is sure you just killed a bunch of orcs or goblins using swing 1 or spell 1, but now that you have used it in action and repeated it enough times you now understand the basics enough for using swing 2 that does a little more damage because of a twist at the end that would have been too difficult otherwise.  Or now by casting spell 2 so many times you now have fingers and tongue limber enough to do the more complex gesture I will show you or pronounce the key spell word better or make the appropriate guttural sound at the end, beginning, etc.

Not saying this has to be your reason, but that is what he gave for us.  Of course, he said we could roleplay it out for each person but then it would be a session to get maybe two people done so we are looking at 2-3 months just to train with everyone else in real life downtime.

Also, I am not saying there needs to be anything like this in your campaign.  Just tossing out some ideas based on what you wrote to help the wheels to spin and maybe get something to form in a way of a solution.
                

                "Anyone want to play a Half-Halfling?"

I vote for the term "Quarterling".
                

                Wouldn't 'farthing' be more appropriate?  Would it weigh 1/80th of a pound?
                

                I'm torn.  Both are good.  Maybe other races use one and only the 'folk' call themselves the other.