The University may stop housing undergraduates at 29 Garden Street next year, Bruce Collier, assistant dean of the College, said yesterday.

About 80 undergraduates now occupy two of the four floors of the former Hotel Continental; graduate students live on the other two.

Collier said that if the number of returning students approximated past figures and the number of freshmen admitted remain steady or decreased, the loss of 29 Garden Street would not cause overcrowding in other undergraduate housing.

"Larger classes are graduating and smaller classes are coming in," Collier said. "Whether this can absorb the whole overflow or not, we're not sure. It is not a large number of people to be absorbed."

The University purchased the Hotel Continental three years ago as housing for graduate students, but because of the needs of the College has so far been at least half undergraduates, Steven S. J. Hall, vice president for administration, said yesterday.

"The working hypothesis has always been that undergraduates will get out," Collier said. "We were supposed to get out of it this year because of the construction of Canaday, but the College felt the need for it anyway."

Collier said that a final decision is not imminent. "We haven't discussed this with the graduate school or the admissions office yet. We will have to analyze numbers," he said.