Dick Schultz, the University of Virginia's athletic director, said yesterday that Olden Polynice's athletic scholarship for the 1986-87 school year definitely has been taken away and that he will not play for the school's basketball team next season.

"The scholarship has been revoked," Schultz said in a telephone interview from Charlottesville. " Polynice can appeal if he wants to, but I have had no indication that he would do so."

Polynice would appeal the scholarship revocation directly to Schultz, who said yesterday that he would turn down any appeal. "I think he needs a year away from it all," Schultz said. "I don't think it would do him or us any good for him to represent the University of Virginia this year."

Polynice, Virginia's leading scorer last season who would be entering his senior year, would be able to qualify on the basis of need for financial aid from both the university and for a federal Pell Grant if he decides to stay in school, according to Schultz. "I haven't done the arithmetic, but he would probably qualify for more money that way," Schultz said.

Schultz had said at a May 7 press conference, shortly after Polynice had been charged with shoplifting $17 headphones from a department store, that Polynice could retain his athletic grant. Schultz said he believed that for two reasons.

"First of all, I was under the impression that the shoplifting charges were going to be dropped," he said, adding that he was told that by Polynice's lawyer, John Lowe. "Then, when they weren't dropped, the case was going to be after July 1," he said.

July 1 is the date an athlete must be notified if his scholarship will not be renewed. Polynice's trial was scheduled for July 10. "That put us Virginia basketball coach Terry Holland and Schultz in a bind," Schultz said. "We decided to revoke it, with the idea that, if he was acquitted, it could be reinstated. You can reinstate an athletic grant at any time."

Polynice pleaded no contest to the charge on Thursday, and was given a 30-day suspended sentence. The same day, Holland announced through a spokesman he had recommended the scholarship be revoked and said he told Polynice and his family about it June 25. Neither Lowe, Polynice nor Holland were available to comment yesterday.

Schultz said the decision to revoke Polynice's scholarship had nothing to do with the fact that Virginia had 16 players on scholarship, with the NCAA limit being 15.

"The last person who was recruited this year Mark Cooke of Martinsville, Va. was recruited with the option that financial aid might not be available his first year," Schultz said. "It would have been like a redshirt year for him."

Schultz said he had not had any direct contact with Polynice since the shoplifting charge.

"He has to do what's within his own best interests," Schultz said. "He's within striking distance of getting his degree, but I think he needs to get himself into an environment where he will have a successful life style."