SINCE STANDARDS are falling everywhere, it should come as no surprise that a midwestern school for prostitutes has shut down, the victim - at least in part - of changing times.

"The madam was an authority figure, allowed no drugs and believed in professional ethics," said Barbara Sherman Heyl, assistant professor of sociology at Illinois State University, who studied the school for four years.

"She complained that young girls didn't want to work at their profession anymore . . . didn't care about becoming real pros. Her idea of what a prostitute should be didn't jibe with the ideas of the girls she was training. There was a real generation gap."

Heyl, a 35-year-old mother of two who teaches a course in deviant behavior on the Illinois States campus in Normal, Ill., said the school grew out of the same vocational traffic circless that clutter the rest of the job market: in order to get a job in a whorehouse a girl needs house experience, but she can't get that experience without having a job.

While call girls and streetwalkers - the mom and pop stores of hookerdom - can hang out a shingle anytime, anywhere, house protitutes share more of a corporate enterprise, Heyl says.

Unless everyone in the house is a top 'performer and works together, the reputation and income of the whole house suffers. Madams are thus unwilling to hire girls with only a dilettante's background in their art.

Thus was born the school for scandal which Heyl studied and whose life and death she chronicles in a forthcoming book, "The Madam as Entrepreneur: Carter Management in House Prostitution," (Transaction Books, Rutgers University Press).

The school, which Heyl says operated in a middle-sized midwestern city, formed part of a carefully conceived marketing strategy designed to offer youth and variety while holding down cost. Much as the patrons of a barber college can get their locks off at a reduced rate, customers at the school for whores were drawn by its lower fees (roughly a dollar a minute) and perhaps the accomplishment of helping a novice get started in a new career.

In addition to instruction in such physical skills as pelvic movement and oral sex, the girls were schooled in the more subtle (and, Heyl says, the more difficult) psychological side of a prostitute's calling, including "parlor talk," putting a customer at ease and bargaining for the fee. They were even counseled in hygiene, protecting themselves and avoiding the depression that often accompanies the girl's increasing separation from straight society.

"When you think about it, sexual behavior is a very complex social phenomenon," said Heyl. "This idea that everybody is born knowing how to do it is ridiculous . . . To be successful in it as a career . . . a girl is going to have to know values as well as skills - how to feel OK about herself and what she's doing." "It's Not a Pretty Business"

HEYL SAID she first learned of the school in 1972 when one of the students in her deviant behavior class asked if a prostitute he knew could address the group.

Since the students were studing illegal behavior and had heard other speakers from the wrong side of the law, Heyl said, she sought the counsel of the university administration and, "with fear and trembling, agreed."

I wanted the students to confront these people as human beings . . . to understand that their activities in most cases stem from the same sort of needs that all of us have," Heyl said. "They just respond to those needs differently."

When the woman appeared for the lecture, Heyl said, she was tastefully dressed in a pants suit, wore little makeup and "generally confounded all our stereotypes."

"She was attractive, articulate and obviously educated, apparently with some college background," Heyl said.

She was such a sympathetic figure that some of the coeds might have started rethinking ways to pay off their tuition had not the woman been "extrataordinarily honest about her work."

"She told them not just about the sex and about the money, but about the violence, the danger, the threat of disease and the simple wear and tear on the body," Heyl said. "It's not a pretty business. You get old fast."

Heyl struck up a freindship with the woman and returned with her to house she managed, which turned out to be the prostitution school. Off and on from 1972 until the school closed in 1976, Heyl said, she would spend time at the house interviewing the girls and studying their lives.

At first, she said, the school functioned well. Pimps who, had girls they wanted to place brought them there for a two-month course of instruction, after which they graduated with a sort of Mistress of Arts degree. The girls were usually 18 to 20 and the steady turnover provided the house with youth and variety to make up for the lack in experience.

But gradually, Heyl said, a division grew up between the madam and the girls: she found them unwilling to accept any sense of personal values or to work to improve their art.

The girls refused to help each other and work together for the good of the house, preferring a basically passive and selfish role.

Like an athlete, a dancer or any other professional whose career is tied to a youthful body, the madam had retired in her early 40s and was attempting to "coach" - passing on the wisdom she had learned since she started whoring at age 15.

But the school eventually closed down, Heyl said, and now the woman is facing serious adjustment problems - despite her obvious intelligence as she attempts to make her way.

"She had been out of straight society for more than 20 years," Heyl said. "She didn't even know how to run a washing machine."