Occasionally joking with his audience, U.S. Sen. Arlen Specter, R-Pa., met with about 190 area residents yesterday, during a question-and-answer session on topics ranging from higher education and social security to drugs and the Clean Air Act.

"I'm here today as part of my travels around the state to meet with my constituents and see what's on their minds," Specter said to the crowd at South Hills Business School, 480 Waupelani Drive.

Specter also held a private meeting with some members of the newly created Pennsylvania Skills 2000 Coalition, a group formed to lobby for Pennsylvania private trade and technical schools.

With current federal budget considerations and the impending 1991 re-authorization of the Higher Education Act of 1965, the coalition is trying to alert legislators of trade and business schools' roles in higher education, emphasizing the necessity of federal student aid programs, said JoAnn Bonfatto, financial aid director of South Hills.

Because a few private schools have high default rates, some groups are suggesting that federal aid be shifted from private trade and business schools to four-year universities, said Chuck Wolf, a financial aid assistant at South Hills. A default rate is determined by the number of former students who do not repay their loans.

"The move is by the universities to say, 'Well, why not cut the aid from private business schools or trade schools and toss it back into the four-year universities,' " Wolf said. "What will hurt is if they decide if a few cases of trade and vocation schools have not kept good bills, it gives all trade and business schools a bad name."

Wolf said South Hills has a default rate of about 2.8 percent. The school is involved in the coalition but he could not provide any other names of the group's members.

During the question and answer session before the meeting, higher education was top on the list of Specter's concerns.

"We're in a tough competitive battle with the Japanese -- the answer is going to be in educating our youth," Specter said. "The president said he wants to be the education president. I want to help him do that."

Accusations that the president is not fulfilling his promises to education are unrealistic, Specter said, noting that available funds are limited by other items in the budget.

Specter spent an hour answering the questions of about 21 audience members on a variety of issues, including:

-- The Clean Air Act, which is up for Congress's consideration again today. "There is an agreement that there will be a reduction of 10 million tons of sulfur. The question is how it's going to be paid for," Specter said. "That's where the argument is now going to be waged."

-- The drug war. More emphasis on education and rehabilitation is needed on battling the demand side of the country's drug trade, which currently receives 29 percent of federal funds, Specter said, adding that the split should be even.

"It's a Herculean task we are moving ahead on," he said.

-- The deficit. Specter said he supports a proposed Constitutional amendment that would mandate a balanced budget and a line item veto.

-- Social security. "(Social security funds have) been used on the deficit, which is unfair. The social security tax should be preserved in a trust fund for use only on social security," Specter said.

-- Campaign funds. Specter said he favors changing the campaign financing system, and is against public financing.

"It seems the office goes to whoever buys it," he said. The senator said he has co-sponsored an amendment which would limit campaign spending.

The audience occasionally applauded Specter's answers during the hour-long session, which was televised by C-Net.