"One of the few times I've ever seen my boss really mad is when those lobbyists came to try to get out of the tax bill," says the aide to a prominent Senate leader.

What worries college and university officials is that the aide was talking about higher education and not traditional special interests such as steel manufacturers and oil producers.

The Senator's reaction is becoming typical according to lobbyists for several universities. "I have noticed a disturbing growth in cynicism about universities, the one attitude we cannot long survive," says Robert M. Rosenzweig, president of the Association of American Universities (AAU).

Long accustomed to public respect and support for their schools, college and university officials were taken aback last year by two major legislative defeats. These defeats seemed to indicate that Congressmen were beginning to view higher education "as just any other special interest."

The Reagan Administration could not be happier.

Led by Education Secretary William J. Bennett, a graduate of the Law School, the Administration has launched a media blitz aimed at criticizing what Bennett has termed "Our Greedy Colleges." In a recent article in the New York Times, Bennett portrayed higher education as a big business that fails to deliver the product.

And Bennett has backed up word with deed. In its education budget for fiscal year 1988 the Administration called for a 45 percent reduction in student financial aid from $8.2 billion to $4.5 billion and a $5.5 billion cut from federal spending of $19.5 billion on education.

In response to these attacks officials at Harvard and other colleges and universities have hastened to defend themselves against accusations criticizing undergraduate education and rising college costs.

"Higher education is becoming the whipping boy for Bennett for reasons that have less to do with the state of higher education and more with his own peculiar ideas about budgeting and educating," says Harvard Vice President for Government and Community Affairs John Shattuck.

"Unfortunately Bennet has made higher education into a political issue," says Shattuck, whose office handles relations between Harvard and federal, state and local government.

Higher education officials admit that new pressures on their institutions, including increasing criticism of their practices and demands to cut the federal budget deficit, have forced them to adopt some of the characteristics of a special interest group. Specifically, universities have increased their lobbying effort to counter these threats.

Meanwhile, government sponsored research at Harvard has become a $132-million-a-year business, with federal agencies providing almost 18 percent of the University's operating expenses.

The government also affects over one-third of Harvard students through federal financial aid programs. Additionally, federal tax and investment laws can have a large impact on the University's fundraising ability.

Taxed to the Limit

"Higher education has been a special interest for several vears now," says Bennett spokesman Love Miller. They always say we're somewhat morany superior and ought to be spared.'"

"Higher education has always been given a favored status because it serves a very important purpose in our society, our culture, and our economy," Shattuck says.

In recognition of this fact, Congress has usually supported legislation beneficial to colleges and universities, such as boosting funds for student financial aid and basic scientific research.

But last year, Congressional action on tax reform and mandatory retirement dealt higher education its first significant legislative defeats in recent years.

The Tax Reform Act of 1986 hurt schools in a number of ways, costing Harvard several million dollars in lost revenues. The overhaul removed deductions for charitable donations to colleges and universities, changed the tax-free status of such institutions when they borrow money, and taxed graduate student scholarships and grants.

Representatives from higher education organizations fought hard to insert provisions which would protect their members. The two largest organizations, the American Council on Education (ACE), an umbrella group of almost all colleges and universities in the nation, and the AAU, lobbied especially hard, but to no avail--The bill passed.

Some Hill watchers believe the tax bill was the turning point in changing Congressional and public perceptions that are now beginning to look upon higher education as a special interest group.

"Their attempts to get exemptions when all the other special interests had to make sacrifices pissed off a lot of Congressmen," said a Senate aide close to the bill's formulators.

"The education lobby put a lot of pressure on us," the aide says. "If Senators didn't look at higher education as a special interest group before [the bill], they sure as hell did afterwards."

But higher education officials think that the Tax Reform Act was neither a defeat for institutions of higher learning nor a signal of a new Congressional sentiment that colleges and universities ought to be treated as another special interest.

"The Tax bill was a unique event," Shattuck says. "I don't think it indicates a change of any kind."

Carol Schieman, AAU director of governmental relations, agrees. "It was just a recognition that higher education had been treated more than favorably in the past while other interests had not," she says.

Some Hill watchers say that the anti-higher education provisions of the bill were the work of one man: Rep. Dan Rostenkowski (D.-Ill.), chairman of the House Ways and Means Committee that drafted the legislation.

"To his eyes, higher education lobbyists were pleading for the same things everyone else was: their own special interest," says a House aide close to the committee. "So why should he give them any preference in a bill that hurt everyone equally?"

Defeat on Retirement

Following on the footsteps of the tax bill setback came another defeat. Higher education representatives strove to include a 15-year exemption for colleges and universities in a 1986 bill that prohibited mandatory retirement, but only got a seven-year exemption.

President Bok personally journeyed to Washington to argue that the bill would handicap the University's attempts to bring new blood into the faculty when the majority of tenured professors turn 70 in 15 years.

Recently, critics have started to point to these two legislative setbacks when they claim that higher education has become an ordinary special interest.

"The tax bill really offended members of Congress because higher education tried to make itself unique," says Miller.

Congressional aides agree. "A lot of malicious stuff in the tax bill that was anti-colleges came out of the House because many of the members felt that higher education was taking actions, like raising tuitions, that were unaccountable to the public," says one Senate aide.

Big Versus Small

A raging furor which has split college and university leaders has also helped give Congress the impression that higher education is a special interest which can be treated the same way as the textile industry or the farm lobby.

The controversy centers around the practice in recent years of what is known on Capitol Hill as "earmarking," whereby smaller universities lobby their Congressmen to legislate funds specifically for their school.

A number of smaller universities have used private lobbyists in this way to bypass the established "peer review system," through which federal agencies distribute money to colleges and universities.

Under the peer review process, federal agencies such as the National Science Foundation or the National Institute of Health call in outside experts to judge proposals for experiments or construction projects based on merit, the competence of the institutions, and the possible impacts of the proposals' results.

"Academic pork-barreling" has divided the higher education community because it breaks with the traditional solidarity between colleges and universities when they went up to present their views on Capitol Hill.

Smaller universities charge that the larger ones are using "an old-boy network," in the words of a Senate aide, to keep federal funds among them-selves, while large universities such as Harvard claim that the peer review system makes the most efficient use of the taxpayers' dollars.

But both large and small agree that the controversy has arisen because federal money for scientific research and equipment has dropped to almost nothing while the cost of an average laboratory has skyrocketed. They also agree that the dispute has hurt the image of higher education in general.

"Many Senators resent the way the large schools like Harvard hoard all the money and all the schools are lobbying up here anyway," says a Senate aide. "It's just not fair and now my Senator thinks higher education is just as greedy as the steel or auto workers."

"It's undeniable that this controversy has made higher education look like a special interest if there ever was one," says Rosenzweig, whose organization represents the nation's 54 major research schools.

In an attempt to heal this growing rift, the AAU sent out a ballot this week asking members if they would support a moratorium on all lobbying for Earmarked funds, says Rosenzweig. In these days of constricted federal budgets, he hopes that non-AAU institutions will respect the moratorium, but cynically adds that "I also hope it won't rain on a cloudy day when I'm having a picnic too."

Especially Interested?

Some educators admit that higher education has become a special interest in the strict sense of the word, but claim that the growth of universities and of the government have not forced them to give up their important position in American society.

"Yes, we are a special interest," says Rosenzweig.

But Rosenzweig and Shattuck agree that the important mission of the university in American society is "essential to national well-being." Therefore they say their lobbying efforts are not on the same plane as the more self-interested industry or labor lobbies because they further policies which are in the "public interest."

The nation's universities deserve the preferential treatment they have received in the past because of their vital position in American society, educators say. By conducting basic scientific research, universities are the engine of economic competitiveness. Colleges and universities are also the "bearers" of the values and habits such as free speech and respect for truth which are important to maintaining American society, they say.

But Education Department officials argue that higher education has become something less than the administrators' rosy picture of the ivy-covered university. "They always pull this moral argument where higher education is on the same level as the flag, mom and apple pie," says Miller.

"What higher education really is now is a big business," Miller says. "All you have to do is look at Harvard's $3 billion endowment to see that."

This argument is at the core of Bennett's indictments of higher education. Harvard's endowment skyrockets but so does tuition, he says. At the same time the quality of undergraduate education has dropped across the country, he says. Bennett uses these points to argue that colleges and universities are a big business that no longer delivers on the product.

While higher education officials agree that their institutions have become "big," they say it is in response to their increasing importance in society.

"We are now beginning to see the consequences of the fact that our major universities have become very large and complex businesses," Rosenzweig wrote in a newsletter this month.

Harvard lobbyist Jane H. Corlett sees that this growth has further subjected higher education to governmental jurisdiction and criticism.

"It's becoming harder and harder to convince Congress that we are not a special interest," says Corlett. "They are asking us more and more to act as a business, which has forced us to become more active in ways that appears like a special interest group."

But the way a special interest appears depends on whether the viewer is a budget-conscious Congressman, an ivory-tower academic, or a headline-grabbing Education Secretary. All agree, however, that higher education is being scrutinized much more closely and that government is willing to make serious cuts into what it once viewed as a sacred cow.