Stephen K. Bailey, a professor at the Graduate School of Education and one of the country's most distinguished educators, died of natural causes last week at his home in Lincoln, Mass, He was 65.

Bailey, who served as Keppel Professor of Education and Administration, was recently elected president of the American Association for Higher Education. In the course of his career, Bailey received eight honorary degrees and served as vice-president of the American Council of Education, an umbrella agency which lobbies in Washington on behalf of universities.

Though he conducted research on and taught about all aspects of education. Bailey specialized in the training of future public administrators. He began his Harvard teaching career in 1977 at the Kennedy School of Government, replacing Professor Donald K. Price.

Price, a former dean of the K-School, yesterday said that Bailey had a "keen awareness of the relationship of education to public affairs."

"He was a delightful person with a keen sense of humor." Price added.

Bailey, who attended Oxford University as Rhodes Scholar, received a Ph. D. in Government at Harvard. He first distinguished himself in 1952 with the publication of his doctoral thesis. "Congress Makes a Law," a behind-the-scenes study of how Congress operates The dissertation won the American Political Science Association's Woodrow Wilson Prize.

During his lifetime, Bailey complemented an extensive teaching career, which included stints at Wesleyan, Princeton and Syracuse University, with active participation in public administration.

He served in the late 1940s on the first Hoover Commission on U S Government Organization after working in the Office of Strategic Service during World War II.

Bailey was also elected mayor of Middletown. Conn, during his tenure at Wesleyan University.

"He believed he should not only be able to teach it but do it, too," said Paul N. Ylvisaker, dean of the Ed School.

Bailey is survived by his wife Cornelia: a son. Morris, of Needham, Mass and a daughter, Lois Ringwald, of New Haven. Conn The family has asked that contributions in his memory be made to the Sidney Farber Cancer Institute in Boston or to a local hospital A memorial service will be held at the Memorial Church at a date to be announced.