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Katie Paul, a tall, brown-haired psychology student, is driving south along the peninsula, watching her future recede in the rear-view mirror. "I wanted to go into a public agency and work with people who don't have funds to go to a private practitioner, and give them the respect and support that someone paying $200 per hour would elicit," says the 26-year-old, who was close to completing her master's in psychology when San Francisco's New College of California began to financially implode last fall.

School was supposed to start more than a month ago. Teachers haven't been paid for nearly four months. Classes are now postponed indefinitely, with the possibility that the college may soon cease to exist.

New College, a self-styled progressive school begun in 1971, is deep in a bizarre meltdown that is creating a wake of human suffering. Students dependent upon financial aid are seeing their aspirations dashed. Teachers are leading classes and helping students, but without getting paid. Meanwhile, a skeleton leadership group is struggling to control an accelerating cascade of financial and organizational crises, all while the school's Web site cheerfully and appallingly invites students to enroll for 2008.

Just as San Francisco has benefited over the years from the work of idealistic New College graduates anxious to change the world, it's now the city's responsibility to halt the potential catastrophe. Community leaders, particularly those with expertise in education (and no prior affiliation with New College), need to step forward and augment what is a decimated and overtaxed board of directors. San Francisco philanthropists, who have long shown a soft spot for advancing idealism and alleviating suffering, now have an opportunity to do both by setting up and contributing to a trust designed to support the school — as long as the trust is independent of the New College leadership responsible for the current mess.

New College, a über-leftist school that inhabits a former mortuary and several other buildings along Valencia in the Mission district, is in a bizarre state of suspended animation in which it doesn't have enough money to function, yet refuses to formally cease operation.

The school can announce that it will close and undertake what is called a "teachout," in which the Department of Education releases enough aid money for students to complete the current semester. New College trustees and interim president Luis Molina have refused to take that option, despite appeals from students and faculty that the school officially shut down so they can get on with their lives.

"I don't know what it's going to look like," said a defiant Molina, a real-estate attorney who has served several years on the school's board of trustees. "But the plan is we'll still be around next year."

This situation has aborted the futures of hundreds of students. It's impossible to say how many remain, as the school has no registrar, but last year there were around 500. Those leaving now would technically be dropping out thanks to the school's ghost-ship status, so many would forfeit tens of thousands of dollars in federal financial aid. For some students, New College credits aren't transferable — the school is famous for its nontraditional curriculum — so they will essentially have to start over.

Paul, who used to cast plays in New York before coming to New College to prepare for a career as a family therapist, says she anticipates dropping her studies and taking a job, and then perhaps starting over in a year or two. "Most programs would accept only one-fourth of my graduate work," she says, which means she'd be out around $30,000 in student loan money.

School staff, meanwhile, haven't been paid for months, despite repeated promises last fall that their next cashable paycheck was around the corner. Several learned at doctors' visits that their health insurance hadn't been paid. Tom Clark, a core New College poetics instructor who was once poetry editor of The Paris Review, became so distressed that his health seriously declined.

"One of the members of our union, Tom Clark, has suffered a stroke because of the financial stress, and it's further complicated by the fact he doesn't have health insurance," said Steven Kushner, New College shop steward for Service Employees International Union Local 1021, which represents school staff and some faculty. "He's one of the most brilliant guys you'll ever want to speak with, and now as a result of the stroke he has a slur. He's not managing, just like most of my people are not managing. They're praying."

New College's situation is changing daily, and specific information about its financial situation is scant. But the news this week was that most of the school has shut down, remaining in business in name only as its directors await a miracle that might allow it to reopen at an undetermined date. It has a small satellite school in Southern California that Molina said is still giving classes — although it's unclear how, given its financial status. The New College of California School of Law, which has been run somewhat independently from the core humanities school, is still operating, though its teachers haven't been paid for several months. Law dean Ed Roybal said he has been in discussions to have the law school absorbed into another institution if New College folds.

Last week, school trustee and Craigslist cofounder Phillip Knowlton was in New York arranging a cash infusion from an undisclosed source, to be routed through a newly formed limited liability company called Friends of New College. That money would sustain the staff's health benefits, which supposedly had a Feb. 9 payment deadline. The exact nature of this transaction is unclear; by press time, Knowlton and Molina had not returned calls requesting a fuller explanation.

Write Your Comment show comments (15)

  1. Until the Office of the Inspector General investigates all the golden parachutes and other payoffs to the people who mismanaged New College's money, we won't know if felonies were committed. For now, none of the trustees -- including Molina, Swan, and Knowlton -- have provided any of the crucial information demanded by the alumni association last July. The fact the trustees continue to operate in secret suggests an ongoing cover-up.

    Comment by Jay Taber — February 12, 2008 @ 07:36PM

  2. Schools which receive DOE funding are required to have sufficient cash reserves to cover expenses in even of "heightened cash monitoring," which is what New College is currently experiencing. New College squandered its cash reserves. New College never developed alumni/ae giving. In July we formed the New College Independent Alumni/ae Association and practically begged the school to let us help. We are repeatedly turned away. New College doesn't want alumni/ae money for some unknown reason. The Director of Alumni Relations tells me she has no time for alumni relations.

    Whether New College survives or fails (and I hope it survives), we are alumni/ae for life. If you attended any program at New College, please join the alumni/ae association! We are open to all former students, whether you graduated or not.
    Holly Harwood ASC BA '05
    http://newcollegealumni.net

    Comment by Holly Harwood — February 12, 2008 @ 09:11PM

  3. Thank you for the first balanced, well-researched article on the dire situation at New College.

    I have been trying to help as best I can - imagine my dismay when, after securing and distributing the WASC Special Visit Team Report, to have the Bay Guardian churn out a negative, misleading article consisting mainly of excerpts from the report. What are they trying to do, run New College into the ground? Does Bruce Brugmann have beef with Peter Gabel or what?

    You, sir, actually researched both the causes of the situation as well as the steps being taken to remedy it. For there most certainly ARE such steps being taken; throughout the students, staff and faculty, the motivation and desire to preserve New College is rampant. But we need help, and perhaps this excellent article will generate some.

    With great respect,
    Alex Brant-Zawadzki
    1L, New College of California School of Law

    Comment by Alex Brant-Zawadzki — February 12, 2008 @ 10:13PM

  4. Thank you for this much needed article. There is so much about New College that is truly worth saving. The teachers, the students, even the janitorial staff are brilliant and committed individuals. New College is a San Francisco institution, the gem of the Mission District, and it is the home of the nation's only Public Interest law school.

    Many incredible programs have developed in New College even in the midst of years of a deteriorating administration. Imagine, how the education will flourish when the administration is completely renewed and revitalized!

    Thank you for calling on the readers, the leaders, the teachers, and friends throughout the Bay Area to come together and help our school reorganize. We need help!

    Rana Chang
    3rd year lawstudent, New College School of Law

    Comment by Rana Chang — February 12, 2008 @ 11:22PM

  5. Judging by their past behavior, this Friends of New College ruse is just another attempt by Martin Hamilton and Peter Gabel -- along with their cronies Ted Corman, Phillip Knowlton, Luis Molina, and Jane Swan -- to bamboozle WASC and defraud the Department of Education. What better way to launder proceeds from questionable real estate deals using federal funds, than to set up a holding company posing as a charitable organization?

    Comment by Jay Taber — February 13, 2008 @ 12:58AM

  6. 1) As a member of the historical community who has worked without pay for the past 3 months for the sake of our students, it gets tiresome to hear the former leadership (Peter, Martin and Milly) get slammed in the press. The reference to "cultlike", referring to the historic leadership of the College, has no basis in fact. Why do you imagine that people who have worked for 25 or more years without personal gain, are "cultlike?" Considering what I have learned in my 28 years here, about the craziness, as well as the incredible ability of New College to encourage students to blossom, or go out into the world and create social change, the historical leadership were heroes who miraculously kept the College's mission alive in the midst of constant financial struggles, for 36 years, while other Colleges simply folded.

    2) The issues regarding the purchase of real estate by the College are not so simple as is implied by your article. The Roxie theatre was not a "purchase", for example. With the transfer of ownership, a donation was made to the College in order pay off the Roxie debts, so literally, we did not "buy" it, but we did save it from closure. The vision for the purchase of the properties was to enhance the College, not for some real estate scheme. For example, the Roxie enhanced our Media Studies program-the Creamery purchase, with KPFA Radio broadcasts located there, gave publicity to the College and that, in turn, enhanced our enrollments. As for the Fillmore property, we intended to create a green student dormitory that could enhance enrollments. (Two of the sellers provided donations back to the College that helped us with our debt-asset ratio that the Dept of Education requires for financial stability).

    The College was in the midst of expanding enrollments and was having trouble accommodating all of its activities in the space that was leased /owned when it sought the UC Laguna St campus. In an unstable economy, the purchase of real estate is considered by many, to be an investment for the future. In hindsight, its easy to criticize, but there are now thousands of Americans in similar circumstances being foreclosed on by banks who are also in trouble, for trying to invest in their own futures by the purchase of real estate.

    3) Most of our recordkeeping for the Department of Education has now been straightened out, if the DOE will only release our funds so that we have a chance to pay salaries to people who could continue doing this work. The students who are suffering for lack of funds are taking the brunt of the delay by the DOE in approving the release of funds.

    4) Although I am critical, I do appreciate your efforts to help us. It would be great if some community leaders would volunteer to join the Board in order help us stabilize our finances and help restructure the College. New College is one of the most unique educational institutions that exists anywhere in the annals of the American educational system. I hope someone can please step forward to help us save it!

    Comment by kathy voutyras — February 13, 2008 @ 05:24AM

  7. This is from Merriam-Webster:
    cult:
    5 a: great devotion to a person, idea, object, movement, or work (as a film or book); especially : such devotion regarded as a literary or intellectual fad b: the object of such devotion c: a usually small group of people characterized by such devotion

    Thank you Matt Smith, for a fair and well-researched article. Let's hope that people in the progressive/radical community find it worthwhile to deeply transform, and salvage the best of, the New College; and also, let's advocate for an investigation into the work of Peter Gabel, Martin Hamilton, and the cult-like circle of friends that has mismanaged the school. Let's advocate for FULL DISCLOSURE: open the school's books! Luis Molina and the Board of Trustees must also be held accountable for their inaction and complicity in this disaster.

    Comment by Brooke Lober — February 13, 2008 @ 10:37AM

  8. One of the lessons New College administrators and trustees learned too late, was that alumni are a college’s greatest asset. Blow them off as irrelevant, and you might as well hang up the For Sale sign. In the case of New College of California, that is exactly what happened.

    Comment by Jay Taber — February 13, 2008 @ 12:22PM

  9. As a research assistant at New College, I have been able to innovate curricula that prepared groups of students to participate in seminars at Harvard as part of their New College coursework. Based on my graduate thesis, I will present at a national conference at Stanford next month. In each case, I’ve brought a radical perspective to otherwise centrist events. The opportunity for individualized, radical, effective education is rare and diminishing. New College has offered that for decades. I appreciate your article for asking outsiders to support the college.

    Comment by neil maclean — February 13, 2008 @ 04:35PM

  10. Creativity does not depend on a decrepit institution run by insipid bureaucrats. It depends on the individual spirit that refuses to be complacent in the face of such petty tyrannies. So this creativity will continue in other places and other ways without the distraction of fending off the interference of incompetent buffoons and mind-bending despots. Diversity in academia, like life, is a healthy thing, but perversity of purpose is not a condition in which it can prosper.

    Comment by Jay Taber — February 13, 2008 @ 09:48PM

  11. The Alumni and Friends of New College of California School of Law was established by alumni of the Law School. It has no connection to Peter Gabel, Martin Hamilton or New College. We're not even sure if the Law School will keep the New College name.
    The non-profit organization is applying to gain tax-exempt status so donations will be deductible from the date of incorporation, Feb. 8 2008.

    From their fundraising letter: "Our immediate goal is to sustain New College of California School of law over the 2008 Spring semester now under way. Contributions paid on a monthly basis over the next five months will be especially effective in helping us do so. If you are able to do so, please give your strong consideration to a monthly pledge amount each month for the next five months. If you are unable to contribute monthly, please submit your donation as soon as possible as funds are needed urgently. Please make your contribution payable to Alumni and Friends of New College of California School of Law and send them to:
    601 Van Ness Avenue, Suite E #875
    San Francisco CA 94102

    Comment by Alex Brant-Zawadzki — February 13, 2008 @ 09:50PM

  12. Who cares. Let it close. Just another wasteful pseudo-educational experiment gone amiss. It never had the standards or the Academic reputation as USC or Stanford. Nothing but a bastion of bogostic pseudo-intellectuals spewing forth inane blabberings of pseudo-truth.
    You want truth? Go to Wikipedia.

    Comment by Calton — February 19, 2008 @ 03:22AM

  13. There is no doubt that faculty and students have been severely abused and exploited. Thank-you for calling for outside intervention to put an end to the obscene and bizarre leadership of the gang of three--Peter, Martin and Millie who ruled through fear and acts of cruelty to maintain total/authorship over their educational experiment. An experiment that enabled them to govern themselves without laws or rules or practices as this was of course the anarchic learning environment that would offer faculty and staff the most valuable eduational expericence. Because afterall these were three brilliant educators who had many lessons to teach. And of course they still do. I believe they tell us when it is time for them to retire because they still are the most brilliant of us all. Aren't they ? Well they are still getting away with federal loan fraud. They are still running the school. They are still setting up shelters to move the existing money around, and they are still not paying faculty and denying students teach out. So pretty brilliant in a very scary way.

    Comment by Tango — February 26, 2008 @ 01:37AM

  14. I enrolled with this college in January of 2008. I was supposed to attend an organic chemistry course at their Whittier Campus. I recieved an email from Craig Anderson that the school was shutting down, and I said do not charge my credit card. However, they charged $1600 on it anyway knowing that the school had no funds, or classes that would start. I asked for the past 3 weeks for a refund and no one even called me back. I am trying to dispute this with the credit card company, and will contact the DA to pursue criminal charges against Lolita, and whom ever did this. Does anyone know of a civil or ciminal litigation starting or in process?? I refuse to let these people get away with this!

    Ryan_c_mathews@yahoo.com

    Comment by ryan mathews — March 8, 2008 @ 06:17PM

  15. A couple of places you can follow the New College saga:

    http://friendsofnewcollege.com

    Sign up on the email list at friendsofncoc-subscribe@yahoogroups.com

    Comment by Darius Cantu — March 29, 2008 @ 08:50PM

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