FROSTBURG, MD. -- At first, Frostburg State University senior Elissa Smith of Bowie hated it here in this mountain college town. "I was used to being around big-city people. I thought everyone up here was backward, and there was no place to eat and shop, no museums." After a semester, she wanted out.

"But once you make friends and get involved, those things aren't as important anymore," said Smith, who lives off campus and likes to ski.

Her friend Monica Prencipe, a political science major from College Park, transferred back to the University of Maryland after two years here. But she found the College Park campus "too impersonal, like one big city of people who don't know you. I was so miserable, my parents said, 'Please go back.' "

Drawn by the state-run school's setting in the scenic mountains of Western Maryland, its location far enough away from home but close enough to make home accessible, and its low tuition -- $1,654 a year -- students from the Washington metropolitan area have been flocking here in increasing numbers over the last decade and are helping make Frostburg State the fastest-growing institution of higher learning, public or private, in the state.

This fall, enrollment climbed to 4,186, up 12.4 percent from 3,725 last year, and almost a third of the students came from around the Beltway. In line with the trend, two-thirds of the school's Division III varsity basketball team graduated from Washington-area high schools.

The 260-acre school lies in a valley below a miner's monument in the shape of a coal tipple and piles of slag that signal active surface mining, both testimony to Frostburg State's origins in the coal country of Allegany County. Coal miners, in fact, helped raise the $2,000 at the turn of the century to acquire the school site, which sits over abandoned shafts and tunnels.

It began in 1902 as a state "normal" school for teachers, with 57 students, half from Frostburg and all but two from Allegany County. It became Frostburg State Teachers College in 1934, with women composing almost its entire student body. It broadened its curriculum to become Frostburg State College in 1963, and this summer by legislative fiat became a university.

University status, granted even though the school has no doctoral programs, represents the growing role of the institution in the economic and cultural landscape of this chronically depressed region. The seemingly cosmetic change from college to university was among the recommendations of a task force seeking ways to revive the economy after the area's largest employer, Kelly-Springfield Tire Co., closed its Cumberland plant last year.

"Education is the foundation of the Western Maryland renaissance," said state Sen. John N. Bambacus (R-Allegany, Garrett), a 1963 graduate of Bethesda-Chevy Chase High School and a Frostburg State almunus and political science professor here since 1970. The university label "enhances the school's image and raises expectations," said Bambacus.

With its student body, expected to grow to 6,000, and its 550 employes, the school pumps $52 million a year into the local economy. "We are the bread and butter of this town," said Elissa Smith. "We buy their goods. We bring tourism."

The school's role locally and in the state is also on the mind of Herb. F. Reinhard Jr., Frostburg's aggressive new president whose 15 months in office have been marked by change and active outreach to the Washington metropolitan area.

According to alumni director Colleen Peterson, business administration courses are the primary draw for students from the metropolitan areas, who return to their home towns for jobs.

Of the school's 13,000 alumni, about 2,500 live in the Washington area, 2,000 around Baltimore and 2,100 in Frederick, many of them commuting to jobs in Montgomery County and the District.

Cementing the metropolitan ties, Reinhard took steps last spring to start alumni chapters. The metropolitan Washington branch has 105 active members, mainly recent graduates like Theresa Gaffney, chapter president, who graduated in 1985 and now works at the front desk of the Madison Hotel. "I get a real warm feeling when I go back. It's like my second home," she said.

Alumni and administrators are actively promoting Frostburg State as more than a fun place in the mountains. Officials proudly note that this fall the school has its first National Merit Scholar, sophomore Katherine Richter, a Prince George's resident who transferred from College Park.

While Reinhard has succeeded in improving its cosmopolitan reputation, Frostburg still has a ways to go.

"We've just now recovered from the image of being a party school," said Tom Bowling, associate vice president at Frostburg State. Still, he said, college board scores of this fall's freshman class are slightly below the national average, and the ski club is "probably the largest student organization."

Skiing was among the attractions that drew Joe Pecoraro to Frostburg from Silver Spring in the 1970s. He and his wife, also a Frostburg State graduate from Montgomery County, now live here with their three children.

Together, they operate Giuseppe's, a popular off-campus watering hole. "I love Frostburg," he said, "and the metropolitan area is only 2 1/2 hours away, so I can go to a Redskins game. This is the best of both worlds."

Not everyone here agrees with that. "It's pretty and all," said Trent Horn, a 17-year-old freshman from Oxon Hill who misses the metropolitan life, "but if you don't have a car, {it's too much work to} ride a bike uphill."