New Orleans's Tulane University, facing significant financial shortfalls since Hurricane Katrina, announced a plan yesterday to reduce its annual operating budget by laying off 230 faculty members, cutting seven NCAA Division I programs and eliminating underperforming academic programs.

Administrators say the long-term plan -- which will ultimately reduce the annual budget by $55 million -- is to create a stronger and leaner undergraduate school by focusing on strong programs in such areas as architecture, business, arts and sciences while jettisoning some engineering programs that were not as highly rated.

Full-time faculty will be required to teach undergraduates, and by keeping the school smaller, officials said they will not have to lower admission standards. Officials also intend to create a stimulating campus environment with more activities for students who can no longer be enticed by the charms of New Orleans -- but may be lured by an opportunity to rebuild a city. Starting next fall, there will be a mandatory public service requirement for graduation.

"We think these changes will be a win-win," Tulane President Scott S. Cowen said of the restructuring, which some experts called the most significant by a major university in decades. "What we are offering is a first-rate education and the opportunity to be a part of the biggest recovery in the last 100 years. . . . It's a unique opportunity that students won't get at any other school in America."

The actions taken by Tulane -- the richest of four main private institutions of higher learning in New Orleans -- underscore the challenges faced by colleges in the Gulf Coast region as they struggle to stay viable after the storm. More than 30 schools suffered a total of $1.5 billion in damage and other losses after Katrina, displacing upward of 100,000 students. Fifteen schools remain closed. This week, former presidents George H.W. Bush and Bill Clinton said that $30 million from the relief fund they lead would go to 32 universities and colleges along the Gulf Coast.

"Colleges are a central ingredient of economic growth for any community," said Terry W. Hartle, a senior vice president of the American Council on Education. "Tulane is sending a very important signal to parents, students and the city that while they might not be exactly the same after Katrina, they are still strong. They are making the hard choices to get going again."

Walter Isaacson, a Tulane board member and vice chairman of the Louisiana Recovery Authority, said the university "is making use of what happened to offer a great place for the study of urban transformation."

The New Orleans schools -- a staple of the city's economy -- have faced uncertainly about the future since the storm hit Aug. 29, fretting over whether students would return to the storm-ravaged area, and whether high school seniors would find any reason to attend college in New Orleans.

"This was a debilitating and unprecedented event and there is no rule book on how to handle it," said Darrin Q. Rankin, vice president for enrollment management at Dillard University, a historically black school. "It's just a lot of heavy lifting."

University administrators have spent the past month traveling the country, imploring students to come to New Orleans. Although the four universities plan to reopen in January, some are in better shape.

The $400 million in damage at Dillard was so extensive that classes will be held at Tulane until a least the fall of 2006. Dillard was forced to lay off 202 employees -- nearly 59 percent of its workforce. Rankin said the school does not expect any of its freshman class to return to New Orleans, and fears it may lose a majority of sophomores, too. Xavier University, also a historically black school, and Loyola University, a Jesuit school, were also forced to cut faculty and staff to function effectively. Both schools anticipate that at least 75 percent of their undergraduates will be back. Xavier spokesman Warren Bell Jr. said yesterday that if that happens, the school will be able to rehire some faculty members.

Tulane, the largest employer in New Orleans, expects 86 percent of its students to return next month. Although it did not suffer insurmountable damage, the university still faces a $200 million deficit because of recovery efforts and loss of revenue. The university's operating budget for fiscal 2005 was $593 million, according to its Web site.

The medical school will shoulder the bulk of the layoffs, losing 180 clinical faculty members. Cowen said the changes will affect a small percentage of students. The school will continue to participate in football, baseball, women's and men's basketball, women's volleyball and women's track. Cowen said the university is also looking into offering outside students a semester at Tulane to fulfill a public service requirement and help rebuild New Orleans. "Like a semester abroad," he said.

The four New Orleans universities are aggressively trying to recruit students for next fall. One hurdle, they all say, is overcoming the fears of parents and prospective students that another hurricane will strike.

Although Dillard, Loyola and Xavier are struggling to lure applicants, Tulane reports that its applications are up about 12 percent overall as of this week, with early-decision applications about 5 percent less than last year.

Richard Whiteside, Tulane's vice president for enrollment management, said the school has essentially doubled its efforts to attract students, contacting about 2 million prospects this year through e-mails and mailings. Tulane also has suspended its mandatory admissions essay. Whiteside said the average SAT scores for applicants were only two points lower than they were last year, allaying fears that the school would not attract good students. Last year, it received 18,000 applications for 1,600 slots.

Still, there are many unknowns for parents.

"My wife noted the other day that we don't even know if any good hospitals are open," said Maryland state Sen. Brian E. Frosh, whose daughter decided not to apply to Tulane.

But neither floods nor terrifying news reports could dissuade Samantha Cooper from applying to the school for next fall. In fact, the worse the news about Hurricane Katrina's impact on the city got, the more driven the Churchill senior became to get herself to Tulane next year.

"I view it as an unbelievable opportunity to help rebuild New Orleans," Cooper said. "It's absolutely my first choice. I want to make a difference."

Facing a major budget shortfall after Hurricane Katrina, Tulane University in New Orleans is planning to save millions of dollars by laying off 230 faculty members and eliminating some athletic and academic programs.