Henry Williams, a starting defensive tackle for the University of Georgia Bulldogs, was dismissed from school last week, along with two other members of the football squad and a woman basketball player. It was big news here, because no one could remember the last time such promising athletes had flunked out.

Williams and the others had the bad luck to come before the faculty review committee of the university's "developmental studies" program after the Jan Kemp case and a state audit had shown that program to be rife with favoritism toward athletes. The head of the remedial English program told the Atlanta Journal and Constitution that "at any time previous to now," some way would have been found to keep Williams in school, although he failed to pass a remedial math course within the required four quarters.

The troubles of the university athletic program came to light in February when Kemp, who had been teaching in the "developmental studies" division, won a $2.57 million verdict on her claim that she had been dismissed from her job for protesting favoritism to athletes.

University President Fred C. Davison resigned in the wake of the trial, and the 108-page state audit released last week broadened the picture of widespread favoritism to the jocks. The whole thing is becoming a hot political issue in Georgia.

Football scandals are nothing new, of course. But in an era when almost every state is stressing efforts to upgrade its education system as a lure to business and new jobs, the embarrassment to Georgia is evident in conversations and in radio talk-show comments. It is not clear, however, whether many of the people criticizing Davison and the university are ready to support higher edcation for its own sake.

At Georgia, the national football champion in 1980 and a consistent big- time competitor, the audit report shows the athletic program is an autonomous power center within the university. The University of Georgia Athletic Association, a 36-year-old private corporation, raised $13.7 million in the last fiscal year and poured much of the money back into recruiting, housing, feeding, tutoring and subsidizing the education of athletes. Those athletes lived a different existence from other students.

The university's "developmental studies" program was set up to assist all students admitted with inadequate intellectual backgrounds or training. But according to the audit report, the athletic department spent $200,000 to establish a separate "learning laboratory" for the jocks, with its own instructors and counselors. The evidence suggests they were often pressured to bypass the standards applied to other "developmental" students.

One unnamed athlete was admitted in 1982 despite the judgment that his "capabilities were those of a fourth or fifth grader." He was still in school, playing his sport, in 1985.

Anyone who thinks university presidents are comfortable with this hypocrisy does not know these men and women. Most of them accept it, with uneasy consciences, as the price they pay for support from alumni, legislators and taxpayers for the academic programs they really value.

Is such institutionalized double-dealing necessary in this day and age? I don't think so. But the answer must come from the fans and the television networks. Between them, they have made collegiate sports the multimillion-dollar business it is today.

Nothing compels us to think that competition among basketball and football players in their late teens and early twenties must be organized by and around colleges. The local high school is a sensible focus for sports for kids up to 17, because most of them are required to be in school until that age. But large and gifted basketball and football players can compete under many other auspices than college colors.

If there is demand for Saturday football games, they can be organized by professional, profit-making franchises instead of college athletic associations. What would be lost if the Columbus Buckeyes played the Ann Arbor Wolverines instead of the Ohio State-Michigan game? How long would it take for tradition, sentiment and betting to inflate the Athens Bulldogs-Atlanta Yellowjackets game to the status of the Georgia-Georgia Tech game?

To be sure, colleges could no longer underwrite their tennis and track losses from basketball and football profits. But the gain in integrity would more than offset the loss of dollars.

Isn't it time to say that higher education is vital in itself -- and let someone other than harried university presidents arrange the games?