Eleven years ago, in response to a 1969 demonstration in which black and Puerto Rican students sealed off part of the campus and renamed it the University of Harlem, the City University of New York startled the academic world with an open-admissions policy.

Today, that policy--which at its inception guaranteed any city high school graduate a place in the system's tuition-free senior or junior colleges--has transformed the city university, one of the nation's largest university systems.

Before open admissions, only 8 percent of CUNY's students were minority-group members. Now, more than half of the system's 172,000-member student body is black or Hispanic. Before the takeover, the system's flagship school, City College of New York, which had been called the "poor man's Harvard," was heavily Jewish. Now its Jewish population is less than 5 percent.

CUNY is now a reflection of the New York melting pot.

It also has been a national laboratory for the challenges facing higher education. It had to take a leading role in accepting large numbers of minority students, in shaping the remedial math, reading and writing programs that more and more college students need, and in dealing with financial cutbacks. The system still spends 15 percent of its budget, $30 million a year, on remedial programs.

Today, the CUNY open-admissions experiment is being repeated across the country due to rising costs and a falling college-age population. The vast majority of colleges now follows a sort of open-admissions policy, even if not by that name.

The University of California, which still doesn't charge tuition at its community colleges, and many state universities in the Midwest have had such a policy for years.

A College Board survey released early this year showed that 34 percent of the schools surveyed accept every applicant, no matter what his high school record.

More than half the others admit everyone who meets their qualifications, turning away few. Only 8 percent of the colleges are now truly competitive, the survey found.

Charles Marshall, executive director of the National Association of College Admissions Counselors, agreed with the results.

"Economics has mandated it," he said. Citing the huge push for college training that followed the Soviet Sputnik space shot in 1957, Marshall said, "We have glutted the market with higher education opportunities. Now, like the auto industry, we have to retool.

"It's a subject no one wants to talk about, but we have to start asking: How to go about an orderly demise? How do we contract? We're going to lose some schools. We have to do it gracefully."

George H. Hanford, president of the College Board, said his group was pushing high schools to improve programs so CUNY and other colleges won't have to spend so much time and money on remedial work. Half of today's entering college students requires such courses, he said.

At CUNY, the drop in admissions standards in 1970 polarized the community. Some viewed it as an overdue experiment in democracy, fulfilling the CUNY mission of making college available to the children "of the whole people."

Others denounced the idea as a violation of traditional academic standards and as political extremism. Vice President Spiro T. Agnew called it "madness," and labeled its advocates "supercilious sophisticates."

Within a few years, the CUNY enrollment had skyrocketed from 170,000 to 250,000, the largest in the nation, and its senior and community colleges were running extensive remedial programs.

But in 1975, the New York fiscal crunch forced another change. Tuition was instituted, hundreds of teachers were laid off, the admissions policy was tightened and proficiency tests were required for students.

Enrollment dropped 40,000 the first year thereafter. Whites left the system in droves. CUNY officials cited adverse publicity, the attractiveness of a growing state university system, the new tuition charges and easier financial aid for the middle class as factors in the drop.

This fall, the CUNY campuses are much different than in 1969. The militant mood has softened, with students more intent on finding jobs than causes. Enrollment has stabilized, and CUNY officials say cuts in federal student aid already are causing transfers back to their schools.

CUNY's 1969 student takeover just hurried officials along a path already chosen.

Chancellor Albert H. Bowker wanted to begin the program in 1975. The Rev. Timothy Healy, S.J., a CUNY vice chancellor at the time and now president of Georgetown University, recalls that Bowker was intent on equalizing the racial mix of the university system to reflect that of New York City. Thus Bowker probably wasn't all that upset at the forced speedup, Healy said.

The overnight plan said New York high school graduates with an 80 average or in the top half of their class could attend one of the system's four-year colleges. Others could attend a community college.

The early experience showed that the children of white, blue-collar workers benefited most from the loosened standards, Healy said. It also showed that open-admissions students were not alone in needing help. About 25,000 of the huge 40,000 freshman class in 1970 went into remedial programs, including 10,000 who would have been admitted before open admissions, he said.

Some faculty members clearly weren't ready for the wave of new students and their academic deficiencies. Philip Baumel, a City College dean, said some of his colleagues became disillusioned when they "didn't walk off into the sunset with thousands of minority graduates." Still, few tenured faculty members have left the system.

David E. Lavin, who has just written a book on open admissions at CUNY with two colleagues, said that at the time the New York City fiscal crisis hit the university in 1975, "there was an increasing view by some members of the Board of Trustees that open admissions were an academic disaster that was eroding if not completely destroying academic standards, and that the public image of the university was declining tremendously."

Lavin and some others still at CUNY feel that the fiscal crunch gave the board an excuse to tighten admissions standards and impose proficiency tests in addition to charging tuition.

Suddenly, college applicants had to be in the top third of their high school class and the 80 average was being enforced as a real minimum. Passing the proficiency tests became a requirement before a CUNY student could enter his junior year or move from a community to senior college.

As a result of the changes, more students were funneled into the community college system. Middle-class whites left CUNY in droves after tuition was imposed. Lavin said there was almost a feeling at the time that "CUNY is only worth going to if it's free."

CUNY officials insist their lowered admission standards were not matched by easy graduation standards. Researcher Lavin noted that only one in four students from the early open-admissions classes eventually graduated. "That's hardly a diploma factory," he said.

There are thousands of minority graduates from CUNY who never would have had a chance at college before open admissions. A study of 1979 CUNY graduates by institutional researchers Barry Kaufman and James Murtha showed that half the community college graduates and a third of the senior college graduates would never have been accepted before open admissions.

The survey also showed that half of the B.A. degree holders and two-thirds of those gaining associate degrees had had to take noncredit remedial courses to sharpen math, reading or writing skills.

But Lavin's research also found that half of the minority students in New York high schools dropped out and thus were beyond the reach of open admissions.

Those who do graduate are heading for college in increasing numbers. The College Board's Hanford, for instance, noted that the rate of college attendance has increased to 85 percent from 50.

Bob Jefferson, a CUNY admissions officer, said increasing demands for skilled employes in New York's growing service economy meant "kids don't have an option not to go to college. There are no Horatio Algers anymore."

CUNY researcher Murtha said there has been an increasing demand in recent years for business, accounting and computer science courses at the university, with a decline in the more classic liberal arts offerings.

Jimmy Chin, Oscar Delarenta, and Steve Wolfe know what Jefferson and Murtha are talking about.

City College freshman Chin is 21. He was born in Hong Kong and came to New York with his parents, who sew sportswear in the garment district. After two years of working in a Chinese restaurant, he said, he decided to go to college "to get a better life."

Dominican-born Delarenta wants to be an actor. But just in case, he said, he's studying data processing at LaGuardia Community College. "That's what the future's all about," he said.

Wolfe is at LaGuardia too, studying accounting. He's 24 and worked for several years after high school in clerical jobs, the last paying $175 a week. He started college, he said, because "I was getting nowhere quick." When he gets his associate degree in March, he plans to get a full-time job with an accounting firm and continue his education at night.

A visit to CUNY campuses last week found a university system that is still defensive in spots about the decade of change. But CUNY also exhibits a diversity that would be hard to match anywhere. Its students are older and poorer than most, many the first in the family to go to college. More than half work. About 40 percent are 25 years or older. More than half are women, a reflection of a national trend.

Queens and Brooklyn colleges are still largely white because of the geographic areas they draw from.

Donna Shalala, president of Hunter College on Park Avenue, is raising money to refurbish her subway stop, reputed to be the only safe one in the university system.

Flora Mancuso Edwards, president of Hostos Community College, said her enrollment of 3,250 is heavily Hispanic, including many students who have been in the United States fewer than five years. Still, her health technicians have a perfect record of passing licensing exams in English, she said.

In a converted bombsight factory on the Queens end of the 59th Street Bridge, LaGuardia President Joseph Shenker directs 7,000 students in a study-work program.

Sixty-five percent of the LaGuardia enrollment are black or Hispanic, 70 percent women. There's even a cooperative program with the city school board in running a high school across the street aimed at helping potential dropouts.

William Ihlanfeldt, dean of admissions at highly competitive Northwestern University outside Chicago, said many college officials have been watching the progress of CUNY for years to see how it handled problems other schools are just beginning to face.

Hanford of the College Board defends the idea behind the CUNY experiment. "Diversity is one of the great strengths of American higher education," he said.

Bowker, father of open admissions at CUNY, said he realized standards are set by the quality of students, which has deteriorated at CUNY and elsewhere.

People who whine about the end of the glory days at City College have to realize, he said, that "the traditional breeding ground for the young geniuses there was the South Bronx. The students are still coming from there. Society just has no alternative but to come to terms with the ethnic population of New York, particularly at a public university."