This was the news lately from the University of Maryland at College Park:

The athletic department was punished by the National Collegiate Athletic Association; the basketball coach was arrested for drunken driving; and just when it seemed the headlines couldn't grow worse, the campus was accused by the U.S. Labor Department of discriminating against minority job applicants.

More quietly, there have been other developments lately at College Park:

The physics department hired an eminent Soviet scientist who turned down offers from Princeton and the University of Chicago. Engineering students built one of the nation's fastest solar-powered cars. And the National Archives picked the campus as the site of a 1.7 million-square-foot research center to house more than half of its collection.

For the century-old campus that straddles Route 1, these are times of contradictions.

Two years ago, the state government gave College Park special status as Maryland's premier public university, a privilege unique in the country. The status has infused the 36,000-student school -- an academic also-ran through much of its history -- with unparalleled political favor, financial help and hopefulness.

Since then, the university has acquired a popular new president. It has drafted an ambitious plan to bolster education and research. And by many indications, it is climbing, at last, toward the ranks of the nation's leading public universities.

"Things are great," said J. Robert Dorfman, vice president for academic affairs.

Yet, try as they might, administrators have been unable to focus public attention on the school's progress.

There has been turbulence from above, as the University of Maryland Board of Regents ousted a chancellor last year, then banished a chairman. And there has been turbulence from within, as the Division I athletic program -- once a source of campus pride -- has suffered budget crises and undergone repeated investigations by the National Collegiate Athletic Association.

In interviews, students, professors and administrators say these disruptions are remote from the school's main focus. But they have nevertheless distracted administrators and dampened morale.

"We have a president and an administration that are truly committed to improving education," said Eron Shosteck, editor of the Diamondback, the campus's student newspaper. "But there have been so many setbacks lately that their efforts have been impeded."

"I feel sorry for President {William E.} Kirwan," said Robert L. Clodius, president of the National Association of State Universities and Land Grant Colleges, to which College Park belongs. "He goes from one damn crisis to another."

Kirwan said in an interview last week that the campus has generated more bad news during his 17 months as president than he would like. But he added, "I couldn't be happier about the rate of our progress. This year is the best the university has ever had in recruiting faculty and students . . . . We are seeing really just an explosion of change."

Change is evident in many ways.

College Park is in the middle of a dramatic 20-percent reduction of its undergraduate enrollment over five years. The cut of 6,000 full-time students is intended to reduce crowding, emphasize graduate education and create a brighter student body.

As a result, the campus has tightened admission standards while offering more scholarships to lure more minorities and better students. The average SAT score of the freshman class has jumped during the last four years from 1,025 to 1,085, out of a possible 1,600 points.

"I know people graduating now who, if they tried to get in as freshmen, wouldn't get in," said Shosteck, who is a senior.

Meanwhile, professors and administrators have designed a new undergraduate curriculum that will take effect this fall. It is designed to give students a better-rounded education and more expertise in their major, break up huge lecture classes, and give freshmen and sophomores more contact with professors.

And there have been efforts to create a more serious academic climate -- a foreign language dormitory, for instance, and a new telecommunications network that will connect students to the library via their own computers.

The campus has hired more professors -- and more prestigious ones.

Four members of the National Academy of Sciences will join the faculty in the fall. They include Roald Sagdeev, a renowned Soviet physicist who has been a scientific adviser to Mikhail Gorbachev; and Thomas Schelling, an authority on economics and public policy who is leaving Harvard University.

The University of Maryland has attempted many of these changes because of new largesse from the state. Traditionally, College Park has lived on subsidies smaller than those of the nation's best public research universities.

But after reorganizing Maryland's university system in 1988, the General Assembly increased its spending on higher education by nearly 25 percent over the last two years -- a bigger boost than in any other state during the same period, according to the Maryland Higher Education Commission.

The school's private fund-raising -- traditionally lackluster -- also has accelerated. Since the campus began its first major fund drive in 1986, cash donations have risen from $4.2 million to an estimated $15 million this year.

But for the coming year, the financial momentum has slowed. The legislature cut money for salaries and insurance, forcing the school to divert money it had planned to use for improvements. As a result, the campus will spend $680,000 in state funds this year on enhancements, rather than the $18 million it had planned.

"It was a great disappointment. It really was," Kirwan said.

The slowdown is worrisome, professors and administrators say, because the campus remains perhaps five to 10 years away from real preeminence. "It takes time to build a great university," Dorfman said. "I don't think you can expect, with two infusions of dollars, to have created a Berkeley."

Compared with the best research universities, people on and off campus say, College Park still has too small a library, two few graduate students and too little investment in research.

This year's financial disappointment has coincided with a renewal of the athletic traumas that started in 1986, when basketball star Len Bias collapsed in a dormitory and died after ingesting cocaine.

"I don't think anything can fire you up as a student more than having a good athletic program," said Michael Shaffer, the Student Government Association's first vice president. "The opposite effect is also true . . . {and} things have been going bad so long."

"Most faculty are absolutely determined we are not going to allow that to get in the way of making educational progress," said Don C. Piper, a government professor who is chairman of the Campus Senate. But he added, "We could take years of marginal athletic success if we weren't embarrassed. But now we have teams of marginal success, and we are embarrassed."

The athletic problems have bruised the school's image off campus, as well. "I'm sure the campus is moving, but these are major distractions from a public point of view," said state Sen. John N. Bambacus (D-Allegany), a Frostburg State University political scientist who is one of two academics in the legislature. "It doesn't place the university in its best posture."

Potentially most damaging, "the athletic thing can get picked up by people with political agendas," said Joseph F. Kauffman, a University of Wisconsin professor of higher education administration, who has been a consultant to Maryland. "The assumption is, if there is a problem there, what else don't we know about? It gives ammunition for people who may want to shoot at you for whatever reason."

So far, College Park appears to have kept important political friends.

On a visit to the campus this month, Gov. William Donald Schaefer gushed with praise. "I am so proud of the University of Maryland," he said, calling Kirwan "a very effective, wonderful man."

And Kirwan appears to retain wide support on campus, where he started work as a novice mathematics instructor a quarter-century ago. "I think Kirwan is doing a commendable job," said Shosteck, the Diamondback editor. "You'll find that perception pretty much all over."

But unless the athletic and budget problems subside, one Maryland higher education official predicted, "he is going to have his leadership tested -- and fairly publicly."

Even now, many on campus feel off-kilter.

"Four or five years down the road, the academics are going to be better, the degrees are going to be worth more, the athletic program may be back on track," said Shaffer, the student government vice president. "Maryland is going through a big identity crisis now. The university is in transition."