THE MARVELOUS thing about education debates in Congress and in the Senate particularly is the great gap that often exists between lofty rhetoric and earthy purpose. As in other areas of government, no topic more excites the members than the formulas for distribution of funds among the states and localities. But rarely in education is that subject discussed in the porky terms reserved for it elsewhere. The debate tends to be in code; nothing is done except in the name of equity, efficiency and the good of the children.

So it was when the subject popped up in the Senate last month in connection with, of all things, the trade bill. The trade bill had a section on education and training that turned out also to contain a proposed revision of the distribution formula for funds under Chapter I, the largest form of federal aid to elementary and secondary education. Chapter I money goes to help poor children; that much is well established. But there has never been enough money to serve all poor children at the level the authors of the program contemplated. There has always been a scrap for funds.

In the House, which has just passed a bill reauthorizing the program, the scrapping appeared in byplay over what are known as concentration grants. Congress and local school boards have always tended to spread Chapter I funds too thin -- to try, for political purposes, to give something to everyone and to end up giving not quite enough to anyone to do real good. The House was under pressure to rectify this, but under equal pressure not to jeopardize the program's broad support by reducing grants to some districts in order only to increase them to others.

Its way out was to say there would be no change in the distribution formula for existing funds -- no one would lose -- but any new funds in the next several years would be distributed according to a new formula favoring high-poverty districts. Even then it had to tinker a little with the definition of high poverty. An older definition favored big cities at the expense of poor rural districts, but key members of the House Appropriations Committee, on whom success of the new idea may depend, represent rural constituencies. And so it was done.

In the Senate the flare-up was over a proposal to create for Chapter I what already exists in other, smaller education programs -- a small-state minimum. Whatever a state might be entitled under the regular formula, it could get no less than this. The theory is that otherwise the grants to some states might be so small they could do no good. And you will not be surprised to learn that the chairman and ranking minority member of the education subcommittee are both small-staters -- Claiborne Pell of Rhode Island andRobert Stafford of Vermont.

Other members from what began to be called the non-small states protested, and the small-state minimum was pulled from the trade bill. It will be back when the education bill itself comes up. Sen. Spark Matsunaga of Hawaii, also a small-stater, explained why. The argument had been raised that some children in larger states would be deprived of services if the smaller states were advantaged. But, in fact, Sen. Matsunaga said, "This program currently serves only 40 percent of eligible children -- there is no dearth of eligible children in any state. With or without a small-state minimum, there will be children who will be deprived." The question is, whose?