August 20, 2001 12:00 PM

Of the scores of young actresses director Garry Marshall considered for the lead in The Princess Diaries, only one stood out. Or more accurately, only one fell off her chair. “I was getting up and my foot slipped,” recalls Anne Hathaway, 18. “That’s what we wanted,” says Marshall, who hired her on the spot as the movie’s awkward teen turned royal beauty. “Pretty and vulnerable and ungainly.”

She may be a klutz, but this Hollywood Cinderella definitely has brains beneath her tiara. “My parents always instilled in me it’s more important to be smart than pretty,” says the Millburn, N.J.-reared Hathaway, who’s about to start her second semester at Vassar College after taking time off to make the movie. The middle child of Jerry Hathaway, 47, a lawyer, and his wife, Kate McCauley, 47, a former stage actress, Hathaway longed to audition for plays since grade school, but “my parents said, ‘You’re going to have a childhood.’ ”

They gave in when she was 16, and Hathaway nabbed a part in the 1999 FOX TV series Get Real. With no future gigs lined up yet, the English major looks forward to singing in her school a cappella group and “just sitting around talking.” On campus “I’m not Annie the movie star,” she says happily. “I’m just Annie.”

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