American University has decided to begin testing new students next fall in the basic areas of reading, writing, and mathematics to make sure they achieve a "high standard of literacy" before they graduate.

Freshmen and transfer students will take the exams, which will include writing an essay and solving math problems with algebra, as soon as they enter the university.

Those who fail will be encouraged to take remedical courses, said provost Richard E. Berendzen, and they will be allowed to repeat the tests each semester.

However, unless students pass by the end of senior year, he said, they will not be awarded diplomas no matter how well they do in their courses.

"We want to make sure as best we can," Berendzen said, "that the degree from the university means not just (passing) courses, but at least a reasonably high level of literacy in basic skills. Right now we can't be sure.

"Our impression is that the achievement of students in basic skills is less than it was 15 years ago," he continued, "not just at American University but as many others around the country. Now we are going to insist that before students can graduate they have the skill that we think a college-educated person should have."

The new examinations, approved by the American University faculty-student senate several weeks ago, are part of a national trend to raise academic standards at all levels of education after a decade marked by loosened requirements, "relevant" courses, and student unrest.

American University is one of very few around the country that have adopted uniform tests as the means to insure a minimum standard of performance by all graduates.

Such tests, usually in reading and foreign languages, were fairly widespread until the 1950s and mid-1960s, according to Frederic Ness, president of the Association of American Colleges. Almost all colleges dropped them, he said, and very few have had the "courage" to bring them back.

"I think the testing makes a lot of sense," Ness said. "But I think they're going to have real problems making it stick. There will end up being a group of maybe 30 students who do not pass the exam (even though they have completed all their courses), and the pressures in that sort of situation are very tough."

Frank Turaj, the dean of arts and sciences at American University and an English professor, said the tests also were being introduced to raise the prestige of the university's diploma and hopefully to attract more students despite competition from low-tution public colleges.

"The only way private universities are going to make it during the 1980s," Turaj said, "is to have a quality product . . . We don't want a student of ours to graduate and have people sy, 'He went to American University. Oh my God, he can't write.' Conversely, we want people to know that if students did graduate American University, they can write, and if somebody has to pick between a graduate of American and one from someplace else, he'll pick oiur graduate, because he'll know the standards we have."

To raise academic quality American University also is increasing the number of courses students normally take each semester from four to five and requiring students to pass a range of courses outside their major field.

The average College Board scores of new students has risen sharply, Berendzen said, after a 10-year slide.

In the face of very though financial problems," he said, "we have mde it tougher to get in here and we are making it tougher to graduate . . . I think we are changing the nature of the institution."

Even though many other colleges also are re-introducing required course and "core" curriculums, Berendzen said American University officials decided to have a competency test too, because "unfortunately, the grades students get don't tell you a great deal."

"We already have reading and composition courses," he said, "but when some of the students who pass them submit an essay (in other courses) it is woefully inadequate."

Berendzen said university officials decided that all students must also pass a mathematics test, including algebra, because "competence in math is part of what a college graduate should have."

Throughout the country about 30 states, including Maryland and Virginia, have adopted minimum competency standards of high school graduates, but in almost all cases the standards are set low and so far only Florida has begun to enforce them with statewide tests.

The City University of New York, which has an open admissions policy for all high school graduates, has decided to require competency tests, beginning next fall, for students entering junior year.

However, the standards are pegged to the 9th grade level on national tests in mathematics and the 12th grade level in English.

"That's preposterously low," Berendzen said. "The role of a university is to be a unversity and not go back and be a junior high school. We're going to set a much more sophisticated standard."

Berendzen said a committee of faculty members and deans would write the questions for American University's exams.