Credit cards with university logos are just one example of the intensifying alliance - for mutual profit - between corporate America and academia.

AT the University of Illinois, more than 1,000 classes on hundreds of subjects were canceled during the last academic year because of severe budget cuts. The Massachusetts Institute of Technology, meanwhile, is getting $25 million worth of money and materials from Microsoft as part of a five year-partnership with the company to develop educational technologies.

The combination of sometimes desperate financial need and innovative ways to make money is a hallmark of a new era in the relationship between corporate culture and higher education. In articles, symposiums and a host of new books, scholars and educators have been warning that the traditional mission and standards of the university are at risk of being compromised by increasing commercialization.

Financial pressures, of course, have always existed. But a series of developments over the last 20 years or so — a university's ability to patent and license scientific discoveries, the Internet's potential to market ideas, and a competitive cultural ethos that relies more and more on rankings in many fields of endeavor, including college admissions — are creating new ethical quandaries. At the same time, government financing for college is decreasing, and tuition covers only a portion of the rising cost, which goes up about 6 percent a year. The university, critics warn, is in danger of selling its soul.

"The language, the way people talk about higher education, has changed," said David L. Kirp, a professor of public policy at the University of California at Berkeley and the author of "Shakespeare, Einstein and the Bottom Line: The Marketing of Higher Education," (Harvard University Press), due out in November. "Market. Consumers. Branding. That we take for granted that higher education is a business is a huge step toward the marketization of higher education."

The Chronicle of Higher Education reported that in the year 2000, colleges received more than $1 billion in receipts from patent licenses, a record for this type of income. Nineteen institutions each received more than $10 million, writes Derek Bok, the former president of Harvard, in his recent book, "Universities in the Marketplace: The Commercialization of Higher Education" (Princeton University Press).

Paying colleges to put corporate logos on syllabuses and course materials or to place advertising signs on buildings is just one of the worrisome possibilities, he warns.

"There is great temptation," he said in an interview.

But another group of scholars and educators is arguing that the handwringing is overblown.

"Commercialization has been an important part of academic life for a long time, especially in American higher education," Steven B. Sample, the president of the University of Southern California, said in an interview. "It's extraordinarily competitive for research grants, gifts, faculty, students. But a lot of the reason for our success has been the intense level of competition. I'm thinking of research universities in particular."

Mr. Sample argues that the poor quality of many public elementary, middle and high schools reflects a lack of competition. Indeed, much of the debate over how to improve primary and secondary education revolves around treating students and parents like consumers, and forcing schools to compete for admissions.

"We may well look back at this period as a tipping point," Mr. Sample said, "but my feeling is things are reasonably in balance. Relatively few universities are involved in businesses that are far afield from the basic academic mission."

Eric Gould, the chairman of the English department at the University of Denver, agrees that colleges are striving for a balance but adds that universities and their critics both ignore the cultural contradictions that have existed all along .

In his new book, "The University in a Corporate Culture" (Yale University Press), he argues that the dichotomy between the academy and the market is false. He points to two recent surveys (one by The Chronicle of Higher Education, one by the Educational Testing Service) that show that Americans are overwhelmingly confident in their colleges and universities. They are confident, he says, because the American university has been the primary engine for economic development in the last hundred years, its growth paralleling the growth of liberal capitalism. Colleges, after all, train people for the marketplace, offer courses in response to that market and help people advance socially and economically.

A degree from a college or university, Mr. Gould contends, is a market-driven commodity. In other words, degrees are valuable because they translate into good jobs and good money.

That doesn't mean, he added, that universities have to let go of the notion that there is an intrinsic value in enhancing creativity, pursuing knowledge and encouraging qualities, like curiosity and openness to new ideas, that cannot be easily quantified. "There are deep cultural contradictions in the way universities have developed in the last 100 years," Mr. Gould explained. They "want to teach ethics and educate more Americans," he said, but at the same time, they also want to provide the practical know-how that corporations need.

Christopher Newfield, an English professor at the University of California at Santa Barbara, also points to the close connection that has always existed between the business world and the academy. In his forthcoming book, "Ivy and Industry: Business and the Making of the American University, 1880-1980" (Duke University Press), Mr. Newfield explores the heyday of industrial capitalism, when the university became central to economic production. In this period of economic uncertainty, he says, there is a deepening fear that the country will not be able to produce a long period of stable affluence like the one that followed World War II.

Like Mr. Gould, he calls for a better balance between the two historical objectives of the university: economic development and human development. He said that as a discipline, the humanities has always understood "the difference between art and work."

"What a lot of higher education is doing is selling a trade education that is part of an old economy," he added. The new economy, he says, demands creativity.

Other scholars have a different concern: that the narrow focus on the commercial is obscuring other, more pressing issues. From California to Maine, from elite universities to junior colleges, institutions of higher education are all too busy competing with one another, said Anthony W. Marx, the new president of Amherst College. All too often, the broader social mission of higher education is overlooked in the debate.

"Colleges differ in the economic diversity of their students, but that diversity is not incorporated into the rankings," he said. "It's a disincentive to create economic diversity. It tends to create a very self-reverential notion of higher education and to destroy efforts on broader social issues on which higher education should provide leadership."

For example, he said, it has been close to a century since colleges and universities have provided the necessary leadership to address the failures of public education, a failure that tends to increase economic and social inequality.

Critics like Mr. Bok and Mr. Kirp are pessimistic. The price tag on intellectual achievement is escalating, Mr. Bok said. Extensive financial demands are placed on colleges and universities to build facilities, lure top-notch faculty members, make scientific discoveries.

The precarious balance between "the bottom line and the life of the mind," Mr. Krip said, has been disturbed. Although some colleges have indeed balanced academic concerns and those of the marketplace, others, he added, "have struck bargains only Faust could love."

Copyright 2003 The New York Times Company. Reprinted from The New York Times, Arts & Ideas, of September 6, 2003.