MILWAUKEE (AP) _ A hypothetical case:

Two scholars seek employment at Marquette University, the 111-year-old Jesuit institution. One is slightly less qualified than the other, but far better versed in Catholic tradition. Who gets the job?

Frank Lazarus, vice president for academic affairs, pauses. ''My guess is that the nod will probably go to the outstanding scholar.''

A true story:

In 1989, the school newspaper, the Tribune, published an ad for abortion rights rallies. The editor and advertising director were promptly suspended.

''In those areas of discretion, we will do the best to run our university in keeping with the traditions and policies of the church,'' Lazarus said.

These are not easy times for Marquette and other church-related colleges, as they struggle to juggle the sacred and the secular, and fend off those who say it is no longer possible to reconcile religion and higher education.

Such an argument would have seemed preposterous to the ministers who founded Yale as a training ground for clergy, or to the 19th-century Princeton academics who developed the fundamentalist, Hodge-Warfield doctrine of the literal truth of the Bible.

But in this century, many schools have purged all but the last vestiges of their founders' faiths, and the religious beliefs that led to their founding are now mainly historical footnotes. Facts, not values, are foremost.

And though some Catholic and evangelical schools are working to reassert their spiritual nature, others continue to shed their cloak of faith.

In the key factors of faculty hiring and student recruitment, religion now plays very little role at many church-affiliated colleges.

''We want people who come from the best graduate schools and have the best publishing record,'' said William Placher, a professor of philosophy and religion at Wabash College in Indiana. ''In that context, it seems narrow and old-fashioned to ask how they feel about the values of the institution.''

At Occidental College in Los Angeles, founded by a group of Presbyterian ministers in 1887, the school is now striving for a ''pluralistic'' image.

''Part of the problem here was that the college was perceived to be continuing to behave as though it were a Christian college,'' President John Slaughter said. ''This created some difficulties with students and faculty members.''

Many small colleges struggled to survive financially in the 1970s and 1980s. By turning away from their religious roots, they sought to attract a more diverse group of students and fund-raising sources, said Mitzi Eilts, coordinator of church-college relations for the United Church of Christ.

Duncan Ferguson, director of the Committee on Higher Education of the Presbyterian Church (U.S.A.), and Eilts said schools can still help foster the church's values in areas such as racial and economic justice.

When black and white students brawled earlier this year at United Church- related Olivet College in Michigan, church officials talked with the college to share their concerns about improving race relations at the school. A new multicultural program is planned.

Otherwise, Ferguson said, the relation between the church and the college is ''artificial, or superficial.''

But many others say limiting the faith to a vaguely defined set of social values does not a Christian university make.

''People in the last five years or so have started to look back and say, 'We have lost something, or something could be lost in the process,''' said Tom Landy of Fairfield University.

Evangelical colleges, partly because many of them have such a relatively recent history, are more committed to maintaining their religious identity, according to Arthur Holmes, author of ''The Idea of a Christian College.''

''I would say it's a combination of the campus ethos, the conscious commitment of the governing board and the identity of the faculty,'' said Holmes, a philosophy professor at Wheaton College.

At Wheaton, Holmes said, that means hiring faculty who are committed Christians and identify with the evangelical tradition.

But the process is not always easy.

In the Southern Baptist Convention, where a conservative revolution has filtered down to the colleges and seminaries, advocates of biblical inerrancy have rubbed shoulders - and butted heads - with academics over who will best preserve the integrity of the university.

Officials at prominent universities such as Baylor and Furman have taken action to wrest control of their boards of trustees from church bodies.

For Catholic universities, struggling betwen the dictates of the universal church and American ideas of academic freedom, the questions can be particularly perilous.

Passions are aroused no matter what direction the school takes.

Heat from church liberals comes when Georgetown University denies official status to a homosexual group, or Boston College denies recognition to an abortion rights group.

Church conservatives are outraged when Notre Dame gives its highest honor to New York Gov. Mario Cuomo, or Boston College permits the president of Planned Parenthood to speak on campus.

When the Vatican barred the Rev. Charles Curran from teaching theology at the Catholic University of America, a panel of the American Association of University Professors stepped in. The professors said the university violated Curran's academic freedom, while the university responded that freedom does not give a Catholic theologian the right to disregard church teachings at a Catholic school.

For professors raised in this atmosphere and concerned about making an academic name for themselves, there is a mistrust that any discussion of preserving Catholic identity means giving up academic freedom.

''If you tell scholars or academics what to do, they react pretty badly,'' said Landy.

He is organizing a collegium for young Catholic professors throughout the nation, emphasizing the positive aspects of the Catholic intellectual tradition, such as promoting social justice or ethical discussions in various disciplines, he said.

At Marquette, school officials have established a goal of becoming ''a national paradigm for joining faith and knowledge'' in the modern era.

Lazarus, the vice president, said the university guarantees academic freedom to its faculty and goes after the best ''professionals'' it can get even as it tries to promote a Catholic ethos for the school.

Catholic scholars tend to be more attracted to a Catholic university, and there is a determined effort to make students aware of Catholic principles throughout the curriculum, Lazarus said.

''If you work for Disneyworld and IBM, the cultures are very clear. ... And I think we should do that. It's only fair to people,'' says the Rev. Andrew Thon, assistant to the vice president for student affairs.

But there are formidable obstacles.

Outstanding scholars many times earn that reputation from professional societies that Lazarus and other officials say are often ''completely secular'' and have anti-religious biases.

And in the last 20 years, the full-time professional staff has dropped from more than 75 percent Catholic, including about a quarter from religious orders, to 51 percent Catholic, with Jesuits now accounting for less than 10 percent.

Is this truly a Catholic university? There is no consensus among students.

Todd Inman, a graduate student in philosophy, said the presence of dissenting theologians such as Dan McGuire and professors who seem to be ''anti-Catholic'' shows the university has lost its way.

''It was a place where parents could send their children and be sure their children wouldn't be led astray. I'm not sure that's the case today,'' he said.

But Angie Nigl, an Episcopalian, said she has been impressed by the students' religious commitment, from attendance at Sunday Masses to the moral debates in accounting classes that has been part of her experience at Marquette.

''When I came to school, I wasn't a very religious person,'' she said. ''Now, I'm even thinking of switching over to Catholicism.''