WHEN the University of California banned the consideration of race and gender in admissions last July, the action raised hopes and fears that it would become the first in a 50-state rollback of affirmative-action laws on the the nation's college campuses.
The UC system, after all, is one of the country's largest and most visible academic institutions, and anti-affirmative action sentiment was mushrooming nationwide.
But the great Ivy-clad revolt hasn't happened. Many colleges looked at the California example and decided not to follow, while others are openly moving in the other direction, reaffirming policies on diversity.
Even within California, the move to jettison affirmative action continues to generate daily debate over how and whether the new policies should be carried out.
Whatever direction the collegiate reaction to this dispute takes, it will have important implications for American society as a whole. The nation's higher-education community has traditionally been in the vanguard of change on social and racial issues and will influence other institutions now grappling with the problem.
''If there was ever a ball rolling on this issue from West to East, it's a Ping-Pong ball,'' says C. Peter Magrath, president of the National Association of State Universities and Land Grant Colleges. ''The impact of the California decision has been far less than people hoped or feared.''
None of the governing boards of the association's 180 member-colleges have passed or even discussed anything similar to the UC action, he says. On the contrary, governors of such states as Texas and Massachusetts decided that their states would not follow the California example.
Others, such as Michigan, briefly raised the issue of following suit, but dropped it. And many campuses are aggressively recruiting more diverse student bodies.
''We are getting more expressions of renewed commitment to diversity in higher education,'' says David Merkowitz, director of public affairs for the American Council on Education in Washington, the umbrella association for the nation's colleges and universities. The Council's own board recently voted unanimously to approve a strongly worded document in favor of diversity.
Meanwhile, despite strong initial support by voters in the polls, the California Civil Rights Initiative (CCRI) - a measure to eliminate gender and race preferences in public employment and contracting - has suffered a low public profile amid fund-raising problems.
And the UC ban on affirmative action has remained in the spotlight of controversy. Regents last week at first refused to reconsider their rollback despite widespread student demonstrations and the protests of chancellors and key faculty members. A delay of implementation was announced then partially rescinded, allowing opponents to claim partial victory.
''The California example is eliciting caution by others,'' says Fred Lynch, author of a book on affirmative action and a professor at Claremont College in California. ''They want to see the lessons before they wade in.''
While the California example is played out, diversity on American campuses is threatened more by the soaring cost of education than the end of affirmative action. A 150 percent tuition increase over four years in states such as California is posing growing difficulty to lower-income college prospects, which are disproportionately minority.
''Most of us who worry about fairness and diversity on American campuses are much more concerned about questions of economic access, financial aid, and assistance,'' says Dr. Magrath. ''With current fiscal stringencies, that's a much more severe issue than the narrow debate over affirmative action.''
In a trend that has been growing for 15 years, the greatest source of student aid is loans - repayable in full - rather than grants. With that, ''the most disadvantaged students will increasingly look at options other than college,'' says Don Stewart, president of The College Board in New York, a group that sponsors transition programs between high school and college for 3,000 high schools and universities.
INCREASINGLY, the more substantive debate on diversity thus embraces how to achieve fairness for applicants based not on gender or race but on economic need.
''The most pressing question is no longer, 'If you had two, equally qualified students of different races - who would you admit?' but rather, 'If you had two, equally qualified students and only one could pay without aid - who would you admit?' '' says Fred Marino, spokesman for the College Board.
Because their institutions will need to train graduates for an increasingly multi-ethnic America in a shrinking global village, many private institutions are embracing racial diversity not merely on moral or ethical grounds, but in consideration of the long-term financial viability of their institutions.
''It would be academic and financial suicide to avoid reflecting the ethnic makeup of the world our students will have to live in,'' says John Lind, vice president for enrollment management at Southwestern University, a private school in Georgetown, Texas. Partly through the use of those grants it has control over, the university is doubling the number of Hispanics to better reflect the Texas population.
Don Eastman, spokesman for the University of Georgia in Athens, says his school is similarly trying to increase the number of blacks admitted from 12 percent to 25 percent to better reflect race proportions in the Georgia population. But he is looking over his shoulder at recent court decisions in Maryland's Banneker case, in which a scholarship program for blacks was ruled illegal.
''The Banneker case together with the California example are showing us how difficult it is to be color blind on the one hand and on the other to repair some of the historic inequities in American society,'' he says. ''If you try to improve fairness by giving a leg up to poor or troubled families, you get into definitions of infinite complexity.''
The affirmative-action debate could grow, say those who don't consider it a front-burner issue. If the California initiative makes it to the ballot, a new round of discussions will ensue. Until students begin arriving on UC campuses in 1998, the big test will be whether or not the initiative passes.
''My sense is that if CCRI becomes law, this whole wave of introspection will sweep across the country again,'' says Professor Lynch. ''If it loses, the balloon of affirmative action at colleges and elsewhere will deflate and fizzle.''