In the 1950s, when Maryland's state colleges and universities were as racially segregated as its water fountains and lunch counters, Morgan State College's mission was clear.

As the most prestigious black college in the state, the school attracted the brightest black students in the region and gave them an education unavailable to them at white institutions.

A generation of black leaders, including Philadelphia Mayor W. Wilson Goode and Rep. Parren J. Mitchell (D-Md.), went on to distinguished careers after leaving its northeast Baltimore campus.

But when desegregation began and bright black students had the opportunity to go elsewhere, Morgan State's future became less defined.

The need for a publicly supported black school was challenged and there was talk of merging it into the University of Maryland system. Despite a commitment from state officials to preserve the school, and its upgrading to university status, enrollment began a steady decline in 1974 that has continued for the past decade.

More recently, charges of financial mismanagement by the university administration threatened to undermine its traditionally close relationship with Baltimore's black community and endanger funding from the General Assembly.

The financial trouble and the negative publicity that accompanied it climaxed in February in the resignation of Andrew L. Billingsley, the university president.

Now, as the university's Board of Regents prepares to name a successor from among four finalists, Morgan State, founded 117 years ago, is at a crossroads.

The issue for Morgan State University is whether it can both preserve its black heritage and define a role for itself within a large and competitive state university system.

Its success will be watched closely by the nation's 102 historically black colleges, which face similarly uncertain futures. Thirty-four of them are, like Morgan State, publicly supported.

"When a Morgan, a highly respected institution, has a lot of internal problems, it's not just a local situation there," said Samuel L. Myers, the president of the Washington-based National Association for Equal Opportunity in Higher Education. "It affects blacks in general."

After years of uncertainty, alumni and school officials are cautiously optimistic.

"No one can safely say that Morgan is out of the woods, but it's on the right track," said Mitchell, an outspoken critic of Billingsley.

"I think people are saying that Morgan appears to have reached a point of non-retrogression," said state Del. Elijah Cummings, a Democrat from Baltimore who is the chairman of Maryland's Legislative Black Caucus. "It's not going backward."

Morgan State's new mission, as officially outlined by the Board of Regents in 1983, is to become a "high quality urban-oriented research university."

Specifically, the regents adopted a consultant's recommendation that the school enhance its programs in telecommunications, information sciences, engineering, architecture and transportation studies.

The consultants also urged that Morgan State continue to maintain its "distinctive cultural environment" and autonomy from the rest of the state college system.

The new emphasis on professional programs is not meant to obscure Morgan's liberal arts base, said Harriet P. Trader, the university's vice president for academic affairs.

"If you're going to be an effective urban dweller, you need a broad-based appreciation of liberal arts," she said. "On top of that, you can add your career goals."

If students flock to these disciplines, administrators hope that Morgan State will be able to carve a niche for itself separate from other major state campuses in College Park, Towson and Baltimore County. The attempt to modify the school's traditional emphasis, according to education experts, is part of the survival strategy at many of the nation's historically black colleges.

"At some point we're going to have to decide we cannot be all things to all people," said Robert Albright, president of Johnson C. Smith University, a private black school in Charlotte, N.C.

The underlying assumption among state education officials is that Morgan State and Maryland's three other publicly supported black schools -- Bowie State College, Coppin State College and the University of Maryland Eastern Shore -- should remain black schools.

Any attempt to integrate all the schools in the system at the same level, they believe, would make no sense.

"To say that because we have20 percent black population in the state that every college should have 20 percent blacks is ridiculous," said Sheldon H. Knorr, the state's commissioner of higher education. "Everyone has its own identity, and we intend to make them all as good as they can be."

Such a policy represents a change in thinking over the last two decades. In 1970, when Maryland and nine other southern states were sued by the NAACP Legal Defense Fund for maintaining a dual system of higher edcuation, the goal of many civil rights advocates was to integrate enough white schools that there would no longer be a need for publicly supported black colleges.

Five years later, however, Maryland implemented its own desegregation plan setting minority enrollment and funding goals for the predominantly white schools in the state system and committing itself to maintaining and upgrading the black schools.

When the federal government rejected the plan and tried to cut off funding, the state obtained an injunction from a federal judge in Baltimore barring the cutoff -- an injunction that still is in effect.

One goal in the upgrading process was achieved earlier this year when the State Board For Higher Education agreed to start an undergraduate program in electrical, civil and chemical engineering at Morgan State.

Besides broadening Morgan State's professional programs, it is hoped that the addition of the engineering courses will attract more white undergraduates to the campus and satisfy federal officials, who have not given final approval to the state's desegregation plans. Eight percent of Morgan's undergraduates and 40 percent of its graduate students are white.

Reaching a consensus on desegregating Maryland colleges has been a drawn-out but relatively congenial process compared to the bitter disputes in North Carolina, Tennessee and other southern states. But while there might be agreement on the direction in which Morgan State and other schools should move, getting there has been more difficult.

"We're still, I like to say, trying to find ourselves as part of the university process," said Earl S. Richardson, who has served as interim president since Billingsley's resignation.

A major obstacle in developing specialized programs, according to Richardson, has been the high percentage of tenured professors. With so little turnover, he said, recruitment of new, more highly trained faculty members has been difficult.

Another continuing problem has been declining enrollment.

Last month Richardson told the regents board that the number of students had dropped from 4,600 last academic year to 4,300 in full-time, part-time and graduate programs this year.

This compares with the 6,361 students who were on campus in 1975. It also compares unfavorably with the goal of 4,841 students for this academic year, which Morgan State set for itself in the long-range plan adopted by the regents in 1983.

Attracting qualified students also has been a problem. The average combined verbal and mathematics SAT score for freshmen in 1983 was 643, or about the same average as the three other black schools in the state but well below College Park, where the average was 989, and below other predominantly white universities in the system.

According to Richardson, Morgan State will have to begin more aggressive recruiting to halt the decline, but he concedes that the school's recent problems have made that difficult.

"Anytime you get a negative image in the community, you can't change it overnight," Richardson said.

Billingsley, a nationally known black scholar who became president in 1975, came under attack in 1979 when auditors discovered that the school had a deficit of $1 million.

Billingsley resigned five years later, after state legislative auditors reduced the school's financial rating from "poor" to "very poor" and said that problems that had been cited for years had gone uncorrected.

The money problems were particularly upsetting to the Legislative Black Caucus, which feared that state funding, which has risen from roughly $7.8 million annually in 1974 to $13.9 million this fiscal year, would be jeopardized.

Many of those fiscal management problems have been resolved with the hiring of a new internal auditor, state investigators found last month. And Richardson, who is one of the finalists for the school presidency, is credited with being a healing presence on the 122-acre campus.

The university administration has made a conscious effort this fall to boost student morale.

"When any outside institution the state steps in and cleans up the house for you, there's a problem," said Student Government Association President Taiwo Chuwueke, a 25-year-old Nigerian-born senior.

Student leaders such as Chuwueke say that there is a sense of excitement over new dormitories under construction at the south end of the campus and plans for the engineering school.

Curtis Johnson, a 24-year-old senior who serves as the student representative to the board of regents, said that he can sense the change.

"It was like a big thundercloud was hanging over Morgan," said Johnson. "Now the weather's better."