When Stephen Higgins was graduated from tiny Emporia College in Kansas in 1960, he planned to become a teacher. But, on a whim, he took the Civil Service exam and found himself working as an inspector in the Omaha office of the Treasury Department's Bureau of Alcohol, Tobacco and Firearms.

Last month, Higgins, 44, a native of McCracken, Kan., fulfilled a long-time ambition when he was named by President Reagan to head the 2,400-person bureau. But although Higgins says it is a job he wanted and a job he's "proud to have," the promotion is a bittersweet one.

BATF has long been one of the most controversial federal agencies. It must enforce the nation's gun, arson and explosives laws and regulate the alcohol and tobacco industries.

For years, opponents of gun control, led by the National Rifle Association, lobbied for the abolition of BATF, the government's dreaded "gun police." In 1981 the NRA produced a film describing the agency as a "jackbooted group of fascists who are . . . a shame and a disgrace to our country."

Last year, the NRA almost got its wish when the Reagan administration proposed dividing the agency, giving its law enforcement functions to the Secret Service and its regulatory responsibilities to the U.S. Customs Service.

Its budget was cut so much that agents were turning cases over to local police and personally buying gasoline for their government cars just so they could make arrests.

But the NRA, fearing that the Secret Service might be even stricter in enforcing the gun laws than was BATF, quickly switched into reverse, and the administration abandoned the plan, at least temporarily, leaving the agency tattered but intact.

The turmoil, though, has left behind a group of demoralized employes who for many months did not know from one day to the next whether they still had a job.

Higgins, who inherited the agency while its employes were out in droves looking for other work, says that morale now is "not good. It's better, but we've still got a long way to go."

He says that for the sake of the agency he's trying to encourage officials to move forward quickly on their current projects as if there were no problems. "All of us have to demonstrate that there's something here to work for," he said.

Meanwhile, Higgins says he believes his superiors in the Treasury Department still would like to see the BATF divided and absorbed by other agencies within Treasury, but that the prospects for that are not good right now.

"It looks like the department feels the idea was good . . . . They still think the idea is good. But they wouldn't go forward unless they were sure they had the approval of both houses of Congress," he said.

Higgins served as acting director for a year before his appointment and for three years as deputy director before that. In his 22 years at the BATF, he has worked almost exclusively on the regulatory side, a factor that has caused some grumbling among the enforcement agents who are not sure what effect he will have on their jobs. Higgins says he is aware of their uneasiness and will "bend over backward" to to be fair and helpful to them.

"There are always going to be those people who . . . feel you don't have an understanding of what they're doing," he said. But he said that he has to spend so much time on administrative tasks now that he has very little to do with the day-to-day work of either side of the agency.

"I was an inspector, but it's been so long that I'd probably be poor at it right now. I'd be even worse on an investigation," he said. "But it's the agents who are doing the investigations. Our responsibility is to make sure they have the resources they need."

Meanwhile, the outlook for the BATF appears to be improving, if only slightly. Higgins says he's been given authority to hire 85 new agents, who will be the first new BATF employes in two years. The administration has also agreed to raise the BATF budget from this year's $132 million to $157 million in fiscal 1984. When the money committed to the new federal drug task forces is taken into account, the agency's budget will be at the level it was in 1980, just before the Reagan administration took over.