The University of Maryland desperately needed a large new computer for its Baltimore County campus (UMBC).

Baltimore's public schools wanted access to a sophisticated computer-based educational program known as Plato, but couldn't afford it.

Control Data Corp. of Minneapolis, maker of computers and developer of Plato, wanted buyers for both.

Result, after two years of negotiations: an unusual deal that will give the university the computer it needs and make Plato available at a discount to all the state's public schools.

The university selected Control Data's Cyber 170/720 as its computer, and the machine is scheduled to be installed in the library of the Catonsville campus next month. That should end a computer-resource crisis in which, up to now, the students at UMBC have had to borrow time on a 16-year-old machine at the College Park campus for their research.

In exchange, Control Data is allowing the university to distribute its entire, 11,000-hour Plato curriculum to its UMBC students and those in the state's public schools. The schools can buy Plato from UMBC at far less than the price they would have to pay to get it directly from Control Data, but even the reduced rate should enable the university to cover its costs for the Cyber.

According to Walter Jones, vice chancellor for academic affairs at UMBC and architect of the deal, "we are getting $4 million worth of computer equipment without a dime of appropriated funds," and the cost of delivering Plato to the public schools can be cut in half. Jones called this "the most exciting thing I've been involved with in 19 years in higher education."

Plato, which can operate only on Control Data equipment, is the key to the transaction. Plato (an acronym for Programmed Learning and Teaching), is a vast, elaborate electronic school system. Plato allows students sitting at computer terminals to plug into courses ranging from basic remedial reading to nuclear plant safety. Students can set their own schedule, progress at their own pace, and measure their mastery of the subject as they go along.

United Airlines uses it to train flight crews. Merrill Lynch Pierce Fenner & Smith Inc. uses it to train stockbrokers. Riggs National Bank used Plato on an experimental basis to help train deaf Gallaudet College students as tellers. Individuals use it to learn "accounts receivable collection techniques" or "affirmative action management." According to Henry Walbesser, a professor of education at UMBC, it is "the most elegant system available" for giving individual instruction in a vast array of subjects.

"It can't teach English composition or mathematical problem solving," he told county school superintendents at a recent briefing, "but it does a large number of tasks systematically and patiently, tasks teachers don't want to do."

Ronald Schwartz, director of training for Merrill Lynch, said the "real beauty" of Plato is that "you don't have to gear the instruction to the lowest common denominator," as is often necessary in a classroom. "You can fast-track or remediate, and it has a vast amount of patience."

He said the Merrill Lynch employes who use Plato are "college grads, but we teach specific things they don't learn in school--rules of compliance of certain regulatory agencies, a whole array of management and premanagement courses as part of our management readiness programs."

He said Merrill Lynch's terminals, which are linked by telephone lines to the large central computer where the Plato "library" is stored, are kept open 10 to 12 hours a day, and sometimes on weekends, so the students can work on their own time, and "they don't have to travel. They just get on an elevator."

Plato, he said, is "very user friendly. That's what makes it fly." But it is also, he said, "very expensive," which created a problem for the public schools.

The commercial cost of renting a group of eight termials plugged into Plato's two basic libraries for a school year is about $65,000; access to the 10 specialized libraries, such as "Business and Management," can raise the cost to $90,000. The Baltimore city schools have had a Plato center in one high school, but their desire to expand was inhibited by cost. As a senior official of the school system put it, the annual cost of eight terminals is "more than three teachers."

Enter UMBC. According to Jones and Barry Bateman, Maryland's assistant vice president for computer services, the transaction they devised will work like this:

The university, which has neither the cash to buy the computer outright nor the authority to borrow it, has contracted with Servico Leasing Inc., of West Palm Beach, Fla., to supply the Cyber on a "lease-purchase" basis. The university will pay Servico $600,000 a year for seven years, after which the university will own the machine outright.

The $600,000 is to be raised by marketing the Plato service, which comes with the Cyber, to the state's public schools and other institutional users. Bateman said the university already has "$800,000 worth of commitments," so there is no danger of being unable to meet the payments.

For a public school system, the estimated annual cost of renting eight Plato terminals from UMBC, with access to the full library, is only about $40,000, and it will come with support in the form of graduate students trained in computer-based education.

Jones told the county superintendents--who are now, in effect, UMBC's target customers for this new service--that the contract approved by the state attorney general prohibits UMBC from making a profit. "We can only break even," he said, so the more customers who sign up, the lower the cost to each.

Some of the superintendents were clearly skeptical as they listened to the pitch made by Jones and Walbesser. They asked about the monthly cost of the telephone lines that would link their terminals with the Cyber, and about the incompatibility of Plato with the small computers many of them have already bought.

"Many of us sitting in this room jumped on the bandwagon of teaching machines 10 years ago," said Talbot County superintendent Norman J. Moore, "and we lost our shirts."

Walbesser argued that they should use their existing computer service budgets to buy into Plato because "the software available for microcomputers is dreadful," and because Plato is effective at teaching both gifted and problem students who need more individual instruction than a teacher can provide.

Baltimore city and Anne Arundel County schools, he said, found that "disruptive youngsters change behavior dramatically when working on a machine of this type."

On a program that instructs youngsters in basic sentence structure, for example, Plato rewards the formation of complete sentences such as "the dog runs to the house" with playful graphics acting out the sentence. But an incorrect or incomplete sentence brings the response, "I do not understand that" flashed on the screen. The student has as much time as he or she wants to try it again.

The Plato program is "interactive" with its users. Many questions are answered by touching the screen of the terminal, and unlike courses on video tape, which are fixed in content and time, Plato can move ahead or back and talk to its user as it goes along.

Control Data has used Plato to create what amounts to a nationwide community college. It runs 115 "learning centers," including one in Rockville and two in downtown Washington, where individuals can take any Plato course they want, for a fee.