Edward Blankstein is a new breed of virtuoso whose job it is to pluck the strings of the billion-dollar federal student aid program for the more than 100 institutions who buy his expertise.

His philosophy is best summed up in two sentences: (1) "Empty seats in a school are primarily a mismanagement and marketing problem." (2) "Only about 10 percent of the people out there know they have basic grants available."

Applying these precepts Blankstein brokers $20 million worth of grants and loans to some 20,000 students, by his own claim, each year from a file-strewn suite of offices in a Princeton research complex.

Not everyone is a ebullient about the thriving condition of his business as Blankstein.

Auditors from the Inspector General's Office at the Department of Health, Education and Welfare recently went over the books of one of Blankstein's major clients, Empire Beauty School, a Pennsylvania cosmetology training chain of 17 schools.

HEW officials acknowledged only that there were some "problems" and that steps were being taken to get a look at Blenkstein's own books.

"I threatened to sue them," said the grant entreprenuer, who says he collects a percentage of the federal funds he handles and a $40-per-student fee for each Basic Education Opportunity Grant or National Direct Student Loan application he processes.

In exchange for his fee, Blankstein and his staff of 40 takes over the complex paperwork generated by the various federal grant programs he brokers for his school clients. He prepares requests for grant and loan funds as well as process individual student grant applications as well as advising some clients through a special "outreach program" how their school applications can be passed out at shopping centres, schoolsand churches.

When Blankstein determines how much in federal grants, loans or other aid a student can qualify for he writes the prospective recipient a letter on the stationery of the school involved. Blankstein's form letters begin:

"It is my great pleasure to advise you that the people of the United States, acting through their representatives and senators in the Congress of the United States, have provided funds for your education in the amounts and programs listed below . . ."

Blankstein points to a map of the United States that hangs in his office. Each school he represents has its location marked by a pin. The pins march across the nation and Blankstein hopes eventually to build up his clientele to 200 schools.