Dozens of small, private colleges across the United States - many of them church-related - say they could be forced to shut their doors if the federal government gets its way in a discrimination case now before the US Supreme Court.
Grove City College v. Terrel H. Bell, secretary of education, is ostensibly a sex-bias case. Grove City has refused to sign an ''Assurance of Compliance'' form - indicating that it abides by Title IX of the Education Amendments of 1972 , which bans discrimination against women.
In fact, the Pennsylvania-based liberal-arts school does not discriminate. Furthermore, the federal government doesn't say that it does. What it does say is that the college's refusal officially to endorse antidiscrimination guidelines will result in termination of government grants and loans to both the college and its students.
At least part of that is all right with Grove City's administrators: They don't want direct federal aid. They're against entanglement with government. And that's the reason they won't sign, for to do so would open them to all kinds of other federal scrutiny. But why should their students be punished? they ask. More than 20 percent of Grove City students get some form of direct government aid. Some say that without it, they would have to leave school - or at least attend a college that meets government standards.
Herein lies the crux of this case that the high court will review Nov. 29. Does federal aid to students constitute aid to the school they attend? And should such funds be denied without proof of bias - sex, racial, or other?
The issue, simmering for almost seven years, has divided educators and lawmakers while it bounced around in the courts. When a federal administrative judge found Grove City in violation of Title IX, it issued an order to terminate students' grants and loans. The college, together with several students, then filed suit in US District Court and won a judicial order saying that cutting off student aid solely on the basis of the college's refusal to sign the Assurance of Compliance - and without actual finding of discrimination - was unlawful. However, the Third Circuit US Court of Appeals turned around this decision and ruled that Title IX does not require proof of bias.
Both appellate courts upheld the government's claim that student loans constituted federal financial assistance to the college. Grove City had held, as it still does, that the school itself receives no aid. Only its students get loans and grants.
Several civil rights groups, including the American Association of University Women and the American Civil Liberties Union, have filed friend-of-the-court briefs in this case, taking the position that any financial aid to a college's students should subject the entire school to Title IX guidelines. However, they are also chagrined that the Reagan administration has taken what some term a ''narrow'' view that a school should be allowed to receive federal funds for some programs even if other programs (which receive no such aid) do discriminate.
In addition, 50 members of the US House and Senate, in a similar ''amicus'' argument, say that if Grove City's position is upheld, Title IX will lose its clout and the original intent of the legislation to wipe out sex discrimination might be lost.
The college's allies include a host of small private schools as well as the Mountain States Legal Foundation, the Equal Employment Advisory Council, and the American Association of Presidents of Independent Colleges and Universities. Their arguments revolve around academic freedom, and schools' rights to be free from federal entanglements. Many also say that if the court upholds the government's position in this case, some schools may lose students. Without scholarships and loan aid, some may even have to consider shutting down.
Case analysts say the Supreme Court, in deciding the Grove City case, will have to examine not only previous Title IX sex-discrimination cases but also decisions made under Title VI of the 1964 US Civil Rights Act.
In 1982, in North Haven Board of Education v. Bell, the high court upheld Title IX regulations that prohibited federally funded education programs in public schools from discriminating against nonscholastic employees on the basis of gender.
And in the much-heralded Bob Jones University v. Johnson, Title VI of the Civil Rights Act was held applicable to a college whose only receipt of federal dollars was through tuition reimbursement of veterans under the GI Bill.
Bob Jones, a school that bans interracial dating on the basis of its religious beliefs, argued (like Grove City) that it could not be required to sign an Assurance of Compliance since it receives no direct federal funds.
''This case (Grove City) marks another step along the way in the movement toward equality of the sexes'' says Hamline University law Prof. Joseph L. Daly. Assessing the Grove City case in an American Bar Association publication, Professor Daly writes:
''A decision against the college would mean a giant step forward for groups interested in ending all vestiges of discrimination based on sex discrimination. For institutions of higher learning which have tried to maintain their autonomy, it would mean that the entangling strings they have tried to avoid have been woven into a net which they cannot elude if they wish to survive.''