Students at the University of Massachusetts at Amherst are camping out in make-shift shacks, staging rallies and mailing pennies to state representatives to protest legislators plans to cut $31 million from Gov. Michael S. Dukakis' proposed higher education budget.

"The new budget cuts will be spread across the entire state system of schools, but we'll be hit hardest because we have the most students," said UMass senior Stephanie M. Orefice, a representative to the school's Board of Trustees.

The legislature's proposed cuts come on the heels of two years of budget cuts at UMass-Amherst that have totalled $16 million, said university spokesperson Jim Langley.

"These cuts have had a severe impact on students. The University has had to freeze hiring, meaning fewer T.A.'s and fewer course options for students," Langley said.

"Some students must go to summer school just to fill requirements. This puts the students in the position of paying more and getting less," Langley said.

Opposition to budget cuts has inspired a student-run two-cent campaign that encourages students to send Massachusetts legislators two pennies to express their disagreement with the plan.

But perhaps the most visible aspect of the campaign against the budget cuts has been the construction of a shantytown on campus by various student groups, including Students for a Democratic University.

The shacks are "representative of the student poverty caused by the cuts. We call them `Cut-back City," said Owen R. Broadhurst, a freshman affiliated with the group. He said these structures were different from earlier shanties erected as protests against the apartheid policies of the South African government.

"There are six shacks and a few pup tents up right now, and students have been spending the night in them since February 24th," Broadhurst said. "There are usually 12 to 20 people a night, and different people keep joining so the numbers are growing daily," he said.

Orefice said the shanties and two-cent campaign are only two aspects of the campaign against the budget cuts. "There will also be a bus trip to the Statehouse to join students from the other state schools in lobbying against the cuts," she said.

But both Langley and Orefice said that they had not received any feed-back from state legislators, although the two-cent campaign and the shanties had generated much popular support. A letter-writing drive to protest the budget cuts had produced 1500 letters as of March 3.