THE ATMOSPHERE at St. Timothy's, a small girls' boarding school in the affluent northeast suburbs of Baltimore, is one of restful, contemplative isolation -- 225 acres of rolling land dotted with beautiful old trees, stone walls and school buildings, the focal point of which is a stately stone mansion.

But the impression that St. Timothy's exists outside the real world is somewhat misleading. It, like any other school, is caught up in the trends of the times. Forthunatley, today's trends, at least in education, appear to bode well for "St. Tim's," as the school is known to its students and alumnae, and for other schools like it. The disfavor with which some parents regarded boarding schools 10 years ago has all but disappered -- replaced with new interest in private schools, and in single sex seconday schools.

What happened at St. Timothy's is indicative of what has happened in one segment of education. A decade ago times were tough for the Stevenson, Maryland, boarding establishment. Declining ernrollments brought money problems and even some sliding in academic standards. Now the tide has turned. The National Association of Independent Schools, to which St. Timothy's belongs, reports that enrollment in it member boarding schools rose more than 14 percent from 1975-76 to 1979-80. And St. Timothy's is set to ride the crest of the new wave.

Founded in 1882, it numbers among its alumnae the writer Catherine Drinker Bowen, Class of '15, Marietta Tree, Class of '34, and the daughter of Walter and Joan Mondale, Eleanor, Class of '78. In the 1950s and '60s St. Timothy's, despite its size (enrollment was then only about 160; today it is 128), enjoyed a reputation as one of the top girls' boarding schools in the country. Then in the '76s St. Timothy's saw applications plummet.

"The low point," according to Charles P. Lord, St. Timothy's lanky, affable headmaster since 1978, "was in '71-'73, with a combination of drugs arriving on campuses and Vietnam . . . . For awhile parents said, 'If there's going to be the alcohol and drug scene, I'm going to keep my kids at home.'"

Lord, an alumnus of Hotchkiss and Yale, and the son of a St. Timothy's graduate, class of 1923, said the school was forced to spend about half its, then $1 million endowment during the early '70s in order to offset declining enrollment. In 1974, partly to shore up its dwindling student body, the school merged with nearby but much less pretigious Hannah More Academy, which was teetering on the brink of closing.

Today Lord says application for the coming school year are "off the wall" -- 75 percent over last year, which itself saw a record number of applications. He predicts there will be three to four applications for each of the 40-50 openings when the application period closes in several weeks.

Parents' increasing interest in private schools, says Lord, "often is an expression of dissatisfaction with the public schools system." But he quickly adds, "This is a disturbing factor, not one that we like." Lord says he thinks public schools, in contrast to private schools, are increasingly preceived as offering less challenging work and less preparation for competitive colleges and careers, less individaul attention from teachers, less safety, less discipline and more accessible drugs and alcohol plus the peer pressure to use them.

About 40 percent of St. Timothy's students now come from public secondary schools, a much larger number than in the past. This reflects what Lord calls "a new market for independent schools" -- children who until recently might have been sent to public schools.

Another reason, he says, St. Timothy's applications have risen so much is the renewed interest in single-sex secondary education, after several years of popularity for coeducational. In the early 1970s, partly because of declining enrollments and increasing costs and partly because in a looser social climate it seemed more "natural," several top boy's boarding schools in New England such as Exeter and Andover began to admit girls. Coeducation was attractive for parents, who saw the chance to send daughters to the often larger and better-endowed, and sometimes more prestigious, former all-boys schools.

Janet Wheeler, 17, a senior from Belair, Maryland says she prefers an all-girls school. "There are so [social] pressures here, so you have the opportunity to really be yourself." And there is the notion that adolescents can better achieve in a single-sex atmosphere.

The academic program at St. Timothy's is demanding. In addition to traditional high school requirements in English, math, social studies and science, the shcool's 128 students must take three years of a foreign language -- usually French, Spanish or Latin -- and one year of religion. Students are expected to spend 30 to 45 minutes per coarse each night on homwork, and there is mandatory study hall for about nine hours per week for new girls and those who are failing. Teacher-student relationships often are close because classes usually include eight to 12 students, and two-thirds of the teachers live on campus in faculty residences.

Still, in spite of its pastoral isolation and its academic demands, St. Timothy's has had its brush with some of the same problems which plague other campuses, both public and private. Three students were suspended this year for having marijuana or alcohol. Last year, after a taffic accident near the school, one of the students involved was found with marijuana.

"It was felt that things had gotten a little loose and we needed a shot of cold water," Lord explains, adding, "I don't guarantee there aren't a couple of girls doing something [with marijuana or alcohol], but the general attitude around here is, 'We don't want it.'" Several students interviewed agreed.

Today at St. Timothy's there is clearly an atmosphere of optimism. Things are improving though Lord contends that standards were never compromised during the school's lean years, that St. Timothy's was willing to suffer a hefty deficit rather than accept less-qualified applicants, St. Tim's saw some of the same kind of academic backsliding suffered in high schools nationwide.

Some faculty members say there was a decline in the caliber of students. Joan Griffith, who has taught English for 11 years at St. Timothy's and was a 1957 graduate, called the early 1950s to the early 1970s " the glory years, academically." There was, she says, a higher proportion of superior students. But she adds, "As SAT [Scholastic Apptitude Test] scores have declined everywhere, it is the rare school that hasn't found that kids are as bright as they were, but they aren't as accomplished as they were."

In 1972, 10 of St. Timothy's 32 seniors achieved finalist status or received commemdation in the National Merit Scholarship competition. Seven of 42 seniors did in 1973. But the number has ranged from one to five since then, including this year, in which one student is a finalist and three received commendations in a class of 26. SAT scores in both math and verbal sections have averaged in the low 500s, which is well above average.

As for college applications, there have been variations from year to year, but generally about one-third to one-half of the senior class has enrolled in Ivy League, Seven Sister or other competitive colleges such as Amherst, Williams, Middlebury, Georgetown or Massachusetts Institute of Technology. This year, four students are applying to Smith, three to Yale, two to Wellesley and one to Radcliffe.

Wrenn Miles, 17, a junior whose parents live in Spain, said that because students seek the close teacher relationships they have had at St. Timothy's "the feeling is that smaller colleges that are highly competitive are going to be better."

Lord has noticed that an increasing number of the students have a strong sense of what career they want to pursue. "As you sit around the dining room table you hear a fair amount from the girls about the options in life. A girl will say, 'I wan't a career. I may leave it at some time, but I'm interested in this'. I can't off hand think of any girl who has said, 'My objective is to get a rich husband early.'"

Perhaps their feelings reflect their own family situations. More than half of the students at St. Timothy's have mothers who work outside the home. And Lord credits the relatively recent phenomenon of the two career household as being partially responsible for the increase in applications. Whereas boarding schools like St. Timothy's formerly served mostly very wealthy families, today demand is coming from the middle class as well. "With both parents working and . . . with smaller families," Lord says, "parents are more able to commit more money [to their children's eduction] at an earlier age."

Yearly tuition is $6,600 for boarders and $3,300 for day students. In the current year there is $70,000 in schloarships and $13,000 in loans available to the students. About a fifth take advantage of one or the other.

One of Lord's major projects will be to "double the $1.3 million endowment over the next few years" -- partly to build more housing for faculty and improve facilities and partly to keep tuition low enough for middle-class families.

Otherwise, Lord says he does not see any need to make "revolutionary" changes in the next decade. Reflecting on the increased options for girls today, he adds, "We will continue to provide the basic foundations so that our girls are sensitive as they face life decisions. I think that we have a very definate responsibility to increase awareness in the girls that they will be facing some very real choices in life."