Working to meet a court-ordered deadline to resolve more than 700 discrimination complaints, the Education Department has instituted a major policy change that would restrict the reach of laws prohibiting schools and colleges from discriminating on the basis of race, sex or disability, according to department sources.

Harry M. Singleton, assistant secretary of education for civil rights, said last week that at the direction of the Justice Department, he has instructed his staff to determine whether the educational program involved in a discrimination complaint receives federal aid directly.

The Justice Department view, he said, is that unless the specific program receives the aid, the government won't pursue the complaint--an approach Justice is advocating in a case now before the Supreme Court.

Asked why the Education Department was narrowing its traditional interpretation of the anti-bias laws, Singleton said, "You should ask Brad Reynolds that question, not me." William Bradford Reynolds is the assistant attorney general for civil rights.

Reynolds said yesterday that Justice had told Education that a recent Supreme Court decision required a "program-specific" interpretation of sex discrimination laws. The court did not specify, however, whether it intended the word "program" to apply to an entire institution--the view held in Education's current rules--or a single office.

Education favors the latter view, according to sources within the department.

The effect of the new approach is not clear, but it could keep the Education Department from interfering with discriminatory practices in many areas of education, particularly athletic programs. Whether it would affect discrimination in employment practices--which also are prohibited under other federal laws--or discrimination in admissions is a matter of debate between proponents and opponents of the Grove City brief.

Educational institutions long have been a focus for civil rights activists, who argue that equal access to schooling is a prerequisite to equality in the work place.

Singleton said the new policy "would apply to other race, national origin and disability statutes as well" as the sex discrimination prohibitions involved in Justice's Supreme Court brief in the case of Grove City College vs. Bell. Sex discrimination complaints make up only about 25 percent of the department's discrimination caseload.

"This constitutes an attack on civil rights for women as well as other groups, and is unprecedented in the history of civil rights enforcement since 1964," said Margaret Kohn, an attorney with the National Women's Law Center. "The Department of Education is obligated to enforce its regulations unless or until they are changed. They can't change them merely by refusing to enforce them. But that is what they're doing in these instances."

Current Education Department rules and previous policy have assumed in most cases that, if any part of a school or college received federal aid, the whole institution would be subject to federal civil rights laws. While pursuing its new, narrower policy, the department has made no move to change its rules formally.

One byproduct of the new policy has been the dismissal of an administrative proceeding filed as part of an investigation of two Illinois colleges accused of discriminating against blacks, women and Hispanics.

That case, involving a request to cut off federal funds to Governors State University and Chicago State University because of their alleged failure to cooperate with department investigators, was dismissed by an administrative law judge last week at the request of Education Department attorneys.

Singleton, however, said that he had not authorized the dismissal request, but merely had asked the attorneys in the department's Chicago regional civil rights office to seek a postponement of the case until the Supreme Court resolves the Grove City College case. He said he is looking into the possibility of reopening the case.

Another 10 to 15 cases that were supposed to be resolved by Sept. 7 as part of a federal court order are being held in limbo while department attorneys determine whether the discrimination complaints originate from programs that receive direct federal funding.

Asked how the civil rights office would approach new complaints, Singleton said that it would depend on where the complaints originated. If they originated in an area, such as Pennsylvania, where federal courts have upheld a broad application of the civil rights laws affecting schools and college, the department would follow that approach when pursuing the complaint.

But, he said, if a complaint arose in an area such as eastern Virginia, where courts have taken a narrow view of the law's scope, the department would adopt the narrow view when it examined the complaint.