It may not have a powerhouse football team or a physics department filled with Nobel Prize winners, but Bob Jones University in Greenville, S.C. has never had trouble attracting attention to itself. For over a decade the school and its evangelist president—not coincidentally named Bob Jones III—have waged a legal battle against the federal government in which two cherished American traditions collided head-on: freedom of religion and racial equality. In 1970 the Internal Revenue Service revoked BJU's tax exemption because the school refused to admit black students. Last month President Reagan brought down a political firestorm on himself by reversing that ruling. Stung by the uproar that followed, Reagan then doubled back and offered legislation to revoke tax exemption permanently for private schools guilty of racial discrimination. "The Reagan Administration, when it acted to restore tax exemption to BJU, was fulfilling a campaign promise," said Bob Jones III, 42. "Reagan promised to get big government off the backs of the American people. Unfortunately, he followed up that action with a capitulation to his enemies. He betrayed those who elected him President and pandered to his enemies."

Last week Senators from both parties debated the President's bill, and lawyers argued over whether Reagan's action had mooted a 10-year-old suit the university had brought against the IRS. Meanwhile, in the eye of this legal hurricane, the 6,300-student university went calmly about its business.

Set on 200 acres in the heart of Greenville, BJU looks like most universities—until a visitor notices that none of the boys has a beard or mustache, and none of the girls wears slacks. Boys and girls walk together only if they happen to share a specific destination, and almost every student is white. In 1971 BJU admitted a few married black students; single blacks were let in four years later. The school catalog explained: "Bob Jones University is now required by law to admit students of any race." The handful of blacks who choose to attend BJU must adhere to a rigidly enforced segregation-in-dating policy. "There are three basic races—Oriental, Caucasian and Negroid," explains Jones, who finds justification for his policy in the Tower of Babel story in Genesis. "At BJU, everybody dates within those basic three races."

Although mainstream fundamentalists uphold his right to religious freedom, they do not defend Jones' racial policies. Says Earl Trent of the Board of National Ministries of American Baptist Churches: "I don't know of any of our churches that agree—and I doubt seriously if any of them do." Many Greenville citizens are mystified by BJU's regulations, but most concur that the college turns out top-notch graduates. When it comes to part-time jobs, Bob Jones students are untroubled by the national unemployment figures. "You take any older person who wants a reliable housekeeper or babysitter and they'll hire the Bob Jones applicant every time," says one Greenville resident. "They are always, always good."

The school's strict discipline may account for its students' record of good behavior. Alcohol and drugs are forbidden, off-campus dates must be approved by school authorities, and on-campus mixing between the sexes is strictly supervised. Yet some educators argue the school's discipline is excessive. Clemson University psychologist Rosemary Lowe warns that it could lead to feelings of guilt and anxiety in some students. Alumna Cindy Johnson was confined to campus for a semester when she failed to report a friend, who was expelled, for going off-campus with a boy. After graduation Cindy was banned from the campus when officials heard that she had been wearing pants and criticizing the school in conversation. "I was crushed," she recalls now. "I wanted to be accepted."

Dr. Bob III resides on campus with Beneth, 44, his wife of 22 years, their daughter, Roxane, 17, and sons Bobby IV, 15, and Stephen, 12. His parents, Fannie May and Dr. Bob Jr., the school's chancellor, and his 94-year-old grandmother Mary Gaston, widow of the preacher who founded the school in 1927, live under the same roof with him. The extended family normally eat lunch and dinner together in a private room overlooking the immense school dining hall. Although Dr. Bob III has headed the university since 1971, Bob Jr., 70, who put in 24 years as president, is still active. On weekends both men take to the field to preach in churches that have invited them; during the week they take turns addressing the student body in chapel.

The courtly Southern manner of Bob III shows signs of strain when he is asked to discuss his university's racial policies. His voice tightens as he accuses black activists, especially those in the NAACP, of "raising this ruckus to excite public opinion while the Voting Rights Act is under consideration." (A renewal of the 1965 law that helped extend the vote to Southern blacks is under discussion in Congress.) "Even if this were discrimination," Jones says, "which it is not, though the government disagrees—it is a sincere religious belief founded on what we think the Bible teaches, no matter whether anyone else believes it or not."

In defense of "religious freedom," an impressive and unlikely battery of legal defenders, including the National Jewish Commission on Law and Public Affairs, has risen in support of BJU. Noting a responsibility "to defend the right of those with whom we so strongly disagree," the counsel for the Jewish group argued that "as long as a religious organization does not do something actually illegal, the IRS may not take away that right to dissent." If the IRS lawsuit continues, the legal maneuvering could go on for another five years. Should the final verdict go against BJU, the university would have to pay taxes dating to 1970 which total at least $500,000. But with stony confidence, Bob Jones III plans to win. "I don't care what you think, we're doing what we believe is right," he tells a visitor. "This is a wholesome, decent place. Nobody has to come, nobody has to stay, but if they come they put themselves under our rule voluntarily. In our pluralistic society, why wouldn't a place like this have the right to exist?"