In the famous college in this small midwestern town there is new interest in the philosopher's question: What is the value of education?

The interest derives not from a renaissance of the liberal arts, but from budget cuts President Reagan has proposed in the federal government's college student aid programs.

About half the students in the country get some form of this federal aid, as do about 1,300 of the 2,700 students here.

The proposed cuts in the programs -- among the fastest-growing in the federal budget -- would not force all these students out of school. But some would be driven out, and almost all would be faced with new choices as they decided whether Oberlin was worth it.

The school, where tuition will be more than $13,525 next year, says it can do no more to help.

In the last 10 years it has raised the amount it gives students for education costs from 12 percent to 18 percent of its budget.

"We have always taken the view that those most able to benefit by studying here should be here," said S. Frederick Starr, Oberlin's president. "That is the grand principle."

But "we already give 18 percent . . . to help students with financial aid," he said. "There's no more to give without damaging faculty pay and . . . the quality of the school."

For similar reasons it is not possible to cut tuition.

"In 1939 it cost a parent the price of a standard-size Chevy to send a child to Oberlin," said chemistry professor Norman Craig, who was paying $1,200 per year in tuition when he graduated here in 1953. "In 1950 it was the cost of a Chevy again . . . . In the 1980s it is still one Chevy a year to go to Oberlin. Everyone thinks the price is going up, but imagine how much more a Chevy meant to a family in 1939 than it means to your average family today."

Says James White, head of the college's Office of Financial Aid:

"The thrust of the administration proposal to someone who sees financial-need application forms daily is that the government is saying to students that they can go to school. But the government is not the least bit interested if the school is Oberlin or Lorain Community College. There is no element of choice. No acknowledgment that a bright student could benefit more from an Oberlin than from a community school. Choices will now be a luxury for the rich."

Of the 1,300 Oberlin students on aid, 477 get more than $4,000, the limit Reagan has proposed for federal aid. The average federal award for those students is $5,237, exceeding the proposed limit by $1,237 and making it likely, Oberlin officials said, that they would not be at Oberlin if Reagan's proposals become law.

Similarly, Oberlin officials said 758 of their students with family incomes of more than $32,500 get guaranteed student loans. This would be the limit for families receiving federal aid under Reagan's plan.

Of those students, 174 who require no other aid could "probably get by without the loans," said White. But, he added, the 584 others who require aid in addition to their guaranteed loans would be forced to leave school.

Nationwide, the $32,500 limit would effect 55.6 percent of the freshmen who entered private 4-year schools last year, according to a poll of college freshmen. At Oberlin, the proposal would mean a loss of dollars to 36 percent of students on aid.

In addition to the $32,500 limit on guaranteed loans, Reagan is proposing to eliminate grants, work/study programs, and other aid for students from families with income over $25,000. About 61 percent of Oberlin's students receiving aid have higher family incomes.

Forcing students out of Oberlin would not be the only impact of the proposed Reagan rules. There also would be impact on students yet to come to Oberlin.

Admissions director Carl Bewig said the Reagan plan could produce a two-tiered admissions system -- one for students and parents who can afford the tuition and one for students needing financial aid. The school traditionally has picked the best students and then found a way to pay the bill.

White, the school's financial aid officer, has been told by the college's board that no more of its budget will be committed to financial aid regardless of the news from Washington. Yet, he said, applications for admission are up 20 percent and a record 68 percent of the applicants are asking for financial aid.

Sophomore Paul Andrichuk said he has made his decision. If the president's budget cuts are approved, he said, he will not ask his parents to dig deeper into their $40,000 income. Andrichuk said he will take off at least a semester, possibly a year, to work full time at his summer job loading trucks at a warehouse. Afterward, he said, he may have to go the University of North Carolina, his state school, instead of returning to Oberlin.

Sam Carrier, the college provost, is taking the long view. Oberlin has seen rough times before, he said. How the school will change, and the kind of students in the new Oberlin, are the question.

"You'll recall," he said, "that Oberlin College has been here 150 years. We've seen a lot of changes, depressions and recoveries, and we've accommodated a lot of change. Oberlin College will survive . . . . We don't want to be in the position of saying all cuts are negative because in the long term it's more important to the college that the nation get rid of the deficit. Quibbling over any short-term proposal for budget cuts is secondary."

But Carrier said the proposed budget cuts could ruin the tradition of schools such as Oberlin as a stairway for the hard-working farmer's son from Iowa, the Cleveland immigrant's daughter or the minority family's bright child.

According to college officials, Oberlin ($12,790 in tuition, medical fees and room and board per year), Swarthmore ($12,700), Bryn Mawr ($13,085), Amherst ($12,511), and others of the nation's best private colleges will take on new faces if the president's proposals become reality. So will Stanford ($13,852), Princeton ($14,291) and Northwestern ($13,015), some of the elite private universities.

School officials said the Reagan cuts would not mean having the same student body -- minus a few cars, vacations, and stereos, as suggested by Education Secretary William J. Bennett.

Striving poor and middle-class students, Oberlin officials said, will be forced into state and community schools, leaving Oberlin as a preserve for children with rich parents.

"The real danger is freezing over the middle," Starr said. "The middle-class students are going to get pinched. The rich can pay and the upwardly mobile poor will get some help. But with a $4,000 cap, even the poor will have trouble paying tuition here. It's the middle class, particularly the ones just over the line from poverty, that will be absolutely frozen out."

Even as federal aid drops, Oberlin's endowment also is slipping. The endowment produced 34.6 percent of the college's income in the 1973-74 school year, but 18.2 percent in 1983-84.

Carrier said the endowment has not recovered its real value since the oil shortage and stock market slippage of the early to mid-1970s.

In addition, Oberlin faces rising energy costs, the high price of scientific equipment and books and periodicals for the library. Faculty salaries, now between $20,000 and $65,000, have increased in recent years as well.

And administrators note that even students with no financial aid or scholarships do not pay fully for their education. The value of an Oberlin education, they said, is about $4,500 more than the $9,175 tuition. The difference is made up by the endowment and miscellaneous gifts and grants to students.

The school could increase tuition for students able to pay the full, actual cost of an Oberlin education but administrators said that would make Oberlin noncompetitive with similar quality schools.

"I've gone into 100 high schools across the country in the last few months talking to students, guidance counselors and parents," said Starr. "People want a liberal arts education and they are willing to sacrifice for it, but there is a point past which the pain is unbearable. Take away government help now and that's the straw that will break the camel's back."

Also, according to Bewig and White, upper-income parents increasingly want the school to give grants and scholarships to students who have good grades or exceptional artistic or academic talent, even if there is no need for student aid.

Currently, yearly Oberlin costs break down this way: $9,175 in tuition; $275 in medical and activity fees; $1,590 in room rent, and $1,750 for food, plus $735 for books, recreational facilities and personal needs.

Students get federal money to pay school bills from several major sources. There are guaranteed student loans, awarded in full to students whose parents' have income under $30,000 and on a sliding scale to families with incomes between $30,000 and $75,000.

There also are Pell grants of between $200 and $1,900 given to students on the basis of need; work/study programs funded by the government; Supplemental Educational Opportunity Grants that average about $1,000 per student; a National Direct Student Loan program that offers students $6,000 in loans over their four-year college career.

There are, also, scholarships from the school.

The impact of the proposed Reagan cuts on that mix, said White, would be borne by the "sons and daughters of the blue-collar worker who won't even bother to apply because of the cost . . . . It will lower horizons.