The problem," says Murray Arnold, the coach at Tennessee-Chattanooga, "is that we're academic institutions, but we're in the entertainment business."

There is rarely a second thought about the entertainment value of the teams in the final four. Academically, 12 of 30 basketball players who completed their athletic eligibility in the previous four seasons at Houston, Louisville and Georgia have earned degrees. Another five players from those years are still in school, including four in their fifth year.

At the fourth school, North Carolina State, no graduation statistics were readily available; Bobby Robinson, the athletic department's academic adviser, said none of this year's four seniors would graduate on time. Sidney Lowe, one of the seniors, said he, Thurl Bailey and Dereck Whittenburg all plan to graduate in their fifth year.

According to spokesmen at the schools, four of the 11 Cougars whose eligibility was used up in the last four years have earned degrees; three are still in school. At Louisville, the corresponding numbers are five, 10 and none, and at Georgia it's three, nine and two.

"It's tough to graduate in four years," said Lowe, a senior guard. "But the three of us will be graduating. We've already made arrangements to (finish the courses). Last month we only went to classes three days (because of tournaments). By this time next year, we'll have our degrees."

Walter Byers, executive director of the NCAA, declined to comment about these statistics in particular, but said a concern over scholarship athletes' general academic performance prompted the NCAA to pass the controversial Proposition 48 at its convention in January.

"It is fair to say there is a commonality of interest in Division I membership to improve the academic prowess of student-athletes," Byers said. "It is clear that the academic community wants a better academic performance from student-athletes at a number of Division I schools, and that was the reason behind concerted efforts to take two steps at the convention."

Those two steps are in Proposition 48: a requirement of a 2.0 average in a core curriculum of 11 academic subjects in high school, and a minimum score of 700 out of 1,600 on the Scholastic Aptitude Test (or 15 out of 36 on the American College Test) for first-year eligibility starting in 1986.

The statistics made available by Houston, Georgia and Louisville are not dissimilar to national statistics on all entering freshmen who receive degrees. According to figures in 1981, in the most recent Statisical Abstract of the United States, 52.8 percent of all entering freshmen in 1975 graduated within five years. Assuming that the four players in the fifth year graduate, the three schools' percentage would be 53.

But, unlike the overall student population, an athlete's tuition, room, books and board are paid for and he is supposed to have tutoring help available. The College Football Association, which includes all major football programs except those in the Big Ten and Pacific-10, surveyed its members and found that 49 percent of their football players graduated within five years.

Lowe said: "In past years, college basketball has been very important to a lot of kids, and they got hooked up at schools with coaches who didn't put emphasis on academics."

N.C. State Coach Jim Valvano, on the way to practice today, declined comment about the statistics of the other three schools who played here, saying, "I could talk about that for three hours."

Athletes spend as much as 35 hours a week in practices and strategy sessions, not to mention travel time, as State experienced when it went to Atlanta for the ACC tournament and then to Corvallis, Ore., for the first and second rounds of the NCAAs. When it won there, the Wolfpack remained in the West for the regional semifinals at Ogden, Utah. At Louisville, 31 of 39 players who completed their eligibility during Denny Crum's tenure have degrees, including Darrell Griffith, the most valuable player in the Cardinals' victory over UCLA in the 1980 championship game. But only two of last season's six seniors have degrees. The other four went on to play professional sports.

When North Carolina defeated Georgetown for the NCAA title in New Orleans last year, there were nine seniors on the two teams. All received degrees last year.

According to Robinson, the enactment of Proposition 48 will help other schools be in a position to strive for that kind of degree perfection for their athletes, because the athletes will be better prepared to learn. The rule could still be modified; some institutions claim the use of standardized tests discriminates against minorities.