Consider the diploma. Parents go into debt for it, their children spend 12, 16 or more years scrambling for it, and some say it raises lifetime earnings at least $800,000.

Commencement orators praise it, doctors frame it for their offices and housewives sometimes hang it over the stove.

But like the classroom educastion it supposedly represents, the diploma isn't what it used to be: The sheepskin isn't sheepskin any more.

Once, quite literally the "skivered" hide of a full-grown sheep, embossed by hand and rolled in a ribbon, today's diploma more often smacks of pulp than parchment; an oil-bathed bit of paper stamped by offset press for issuance within the stainproof reassuance of a padded Naugahyde cover.

Jobbers sell it mass-produced for $1 to $10.

"We used to sell over 25,000 pieces of sheepskin for diplomas in a year," said Vera Freeman, a department manager at Andrews/Nelson/Whitehead in New York, for 50 years the nation's leading importer of sheepskin. "This year maybe 2,500. It's our worst year ever."

The sheepskin diploma apparently originated in the Middle Ages, when traveling scholars used to haul it around as proof of their education. That was the beginning of the credentials society.

Sheepskin could be rolled and unrolled countless times without breaking, a feature that gave it the nod over papyrus, an earlier favorite in the document trade.

Tradition carried it into the 20th century, where "that old sheepskin" looms as a June commencement symbol as enduring as the senior prom.

But the sheepskin diploma business apparently peaked, like so many other things, in the late 1950s and early '60s.

"There was a terrible drought in England [where the climate is normally most hospitable to sheep complexions] and the sheep could't graze properly. The quality went down, and the prices shot up," said Freeman.

This scourge, plus development of new and better types of paper parchment, caused schools largely to desert the sheepskin trade, except for a dribble of special, honorary certificates of the sort awarded to valedictorians and Bob Hope.

In the last decade, it has become difficult to find good quality sheepskin at all, according to specialists. The skill of skivering a sheepskin-splitting the hair side from the flesh side to make parchment and vellum, respectively-is dying out.

"The sheepskin you get nowadays is scarred, where the shears hit it," said Hank May, a roving diploma salesman who works cut of his Takoma Park basement. "In the old days, they were hand-shears. Technology is less careful; they want to do things quick."

Today's diploma is usually made of "synthetic parchment" paper of varying quality, the paper ofter bathed in oil, as May said, "to give it the same translucent appearance" as sheepskin.

When the diploma is destined to spend a lifetime immobilized in a frame or in an attic trunk, rather than traveling about beneath the academic robe the wear factor no longer gives concern.

Beside, sheepskin, while prized for its qualities of strength and permanence, has disadvantages. Flexible enough to be rolled up, it tends to shrink and curl when exposed to humidity or heat.

The differences between sheepskin and paper are more symbolic than real, anyway, according to Norman Shaffer, chief of the preservation office of the Library of Congress. His staff still uses sheepskin to bink 16th century volumes, he said, "But it's just for show."

With its substance no longer a factor the modern diploma depends for status on size and style.

At 19 by 25 inches, the diploma of Georgetown Medical School is the largest in the Washington area-"a piece of wallpaper," May called it. Hood College in Frederick and Washington Bidle College have the smallest.

Suffering perhaps from diplomaenvy, George Washington University Medical School has just decided to enlarge its own diplomas, though at 14 inches square they still fall short of Georgetown's.

Another change at George Washington University took place three years ago, when a group of Jewish students protested the diploma's opening flourish, "In the year of our Lord . . ." The line was dropped, except on the diplomas of equally vehement Christian students who counterprotested.

Such decisions are not taken lightly, however, according to Margaret L. Vann, who heads the graduation department ag GWU. She explained, "They go through a committee, then to the Provost, and then to the board of trustees."

Diploma salesman May has a modest stock of trade anecdotes, like the one about the Latin on the diplomas at Georgetown University.

"There's no neuter gender in Latin, and until three years ago, they all used the male gender," he said. "Then a young lady graduate scrutinized one and protested. Now they order a set for females and one for males."

And there was the time when one of his competitors' signature machines accidentally signed a sales sample signature-"John T. Sample"-instead of the name of the college president, to an entire shipment of diplomas sent to Salisbury State College.

May, 34, is one of 400 salesmen nationwide for Josten's, one of the largest diploma companies. He is part of a multimillion-dollar industry that gears up seasonally to provide the props for these annual rites of passage-class rings, caps and gowns, invitations . . .

It is an industry in which, says May, "you sit around with your thumb in your ear most of the year thumb in your ear most of the year and then suddenly there's no tomorrow." The business currently isturning over some 4 million diplomas annually, and they account for less than 10 percent of the sales on the "total graduation package."

The diploma itself once was considered a legal document, but in an era when you can buy one through the mail, May said, "What the employer wants now is your transcript."

Harvard, the nation's oldest university, has had its own print shop for more than a century-a kind of one-stop operation that prints both examinations and diplomas. The diplomas are modest, about $5, on "good paper," no scribe, according to printing office director Carl Getz.

Harvard awarded the first Americal degree in 1642, a bachelor of arts to its first graduating class: nine men.

A tale about Harvard's first president, Increase Mather, illustrates the differences, or perhaps some similarities, between then and now. Harvard was impatient to get into the graduate school business, but there had long been a tradition that only a person who held a doctorate could award one. The problem, notes California historian John Bear, was that no one in America had a doctorate.

Mather being a dissenter from the church, could not earn a degree in England.

Mather solved the problem, as Bear tells it, by having the entire Harvard faculty, two gentlemen named Leverett and Brattle, agree to award him an honorary doctorate. He promptly rewarded them each with honorary doctorates-and advance education was born in the new world. CAPTION: Illustration, no caption, By Robin Jareaux - The Washington Post