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Photograph by Suzanne Daly

School for Scandal

New College of California closes its North Bay campus amid accusations of mismanagement and deep financial woes

By Leilani Clark

T he North Bay Campus of New College of California has come a long way from its heady early days in 1998. At the time, academic director Michael McAvoy celebrated the opening of the Center for the Study of Culture, Ecology and Sustainable Community as the most hopeful learning center for studying social activism in the country. Ten years later, the gates to the building sit locked, and the demise of the North Bay campus and possibly New College altogether are imminent.

The closing of the North Bay Campus is only one consequence of a crisis that began in July 2007 after the private liberal arts school based in San Francisco was put on probation by the Western Association of Schools and Colleges (WASC). The nonprofit accrediting agency cited the school for numerous violations of institutional and academic integrity stating that the school had a "culture of administrative sloppiness and arbitrariness." On Feb. 26, WASC officially stripped New College's accreditation.

"It's a complicated story," says faculty council chair Carolyn Cooke. "New College has always had an uneasy relation with WASC, with rules, with record-keeping, with structure. It hasn't operated like other colleges—building endowments, scholarships, tenure for faculty."

College president Martin Hamilton resigned in August 2007 amid accusations he had altered the transcripts of an international student on the promise of a $1 million bribe. This combined with uproar over lax record-keeping revealed by the WASC report proved to be the deathblow to Hamilton's administrative powers.

The situation deteriorated as the Department of Education (ED) entered the fray, moving the college to a heightened cash monitoring system that required approval of documentation before reimbursement. Years of incorrect paperwork came back to haunt the school. As of January, at least $1 million in federal student aid is being held by the ED, and until the school can demonstrate fiscal sustainability, the funds will remain in limbo.

Faculty haven't been paid since November, students have not received desperately needed financial aid and a semester that should have started Jan. 8 has been indefinitely postponed. In addition, the school is functioning without a certified registrar, meaning students are unable to access transcripts or diplomas.

"I cannot overstate the negative impact this has had on everybody," says New College board of trustees member Jane Swan. "Members from each segment of our community have had to borrow from friends and family, and many individuals have faced eviction." Swan says that the board is in frequent contact with the ED and that they have complied with all requests for information.

Santa Rosa resident and MFA candidate Bruce Machado has not received his financial aid. With two young children at home, he has to make some difficult choices in the near future. "I am very angry that New College has, in effect, closed due to decades of mismanagement, both administratively and financially," Machado says. "With a mere quarter left before I finish my degree, I need to know, can I finish? Or do I have to take a promising job offer out of state so that my family and I don't face eviction?"

In February, students and faculty held a protest at the school's main Valencia Street campus, demanding accountability as well transparency about the school's financial situation. Faculty members such as Cooke have been working since summer to create a faculty arm of academic governance at the college. "We've consistently pushed the board to make decisions that will give the college the best chance of surviving with accreditation," Cooke says.

Founded in 1972, New College of California touts itself as a progressive alternative to traditional educational institutions. In addition to the main San Francisco campus and the Santa Rosa outlet, the college also has a law school on Fell Street in San Francisco, an Emeryville campus and a "science institute" in Los Angeles. The school's motto is "Education for a Just, Sacred and Sustainable World."

This is not the college's first brush with probation. After being accredited by WASC in 1976, the school was found to have violated substantive change policy. In 1980, New College was placed on warning, and in 1984, it was placed on probation for numerous curricular concerns. Accreditation was reaffirmed in 1985 with "the expectation of continued progress in addressing fiscal and curricular issues," according to a WASC report.

Following a 1988 visit, the school was again placed on warning for concerns of governance, faculty and finances. In 2005, the accrediting agency noted concern about long-term financial stability. The college's already shaky ground was not helped by a 2006 revelation from the Oregon Province of the Society of Jesus that Father John Leary, the Jesuit priest who founded New College, holding the very first classes in a Sausalito living room, had sexually abused minors during his tenure at Gonzaga University, where he had taught in the 1960s.

How did a school with a mission statement that espouses sustainability end up in such deep straits? Members of the board of trustees believe that the financial crisis is the result of an administrative system that couldn't keep up with the college's rapid growth. "The delivery of a wider spectrum of programs needed a bigger structure to be sustainable," Swan says.

In a Feb. 15 letter to Ralph Wolff, the executive director of WASC, the board lists a series of tactics to ensure the college's survival. The action plan calls for the closing of the North Bay campus in Santa Rosa effective Feb. 25. Potential sales of properties on Fillmore and Valencia streets, including the school parking lot, are listed for a total of over $6 million. Program directors are formally authorized to move towards a "teach-out" or to move students to other institutions.

"The primary reason the school needs to be scaled back is to demonstrate our fiscal sustainability by running financially sustainable programs. For a period of time, the college has offered some degree emphasis in undergraduate and master's programs that are very important to our mission but currently don't have the number of students to be financially viable," Swan says. She explains that another strategy for fiscal sustainability includes building an endowment to diversify revenue sources so that the school is not so dependent on the ED.

Some critics believe the quagmire is a result of years of financial mismanagement and ill-planned real estate investments on the part of Hamilton and other members of the school's leadership. In addition to its campuses, New College owns San Francisco's Roxie Cinema and the Casa Loma, an old "flophouse" purchased with the intent of turning it into a "green living center" for student housing. That never came to fruition.

"I believe it doesn't take a team of auditors to figure out that with all the bad business investments [Hamilton's] made over the years, no amount of student tuitions could keep us afloat," says Genny Lim, a long-time member of the humanities faculty. According to Lim, the actions of the former administration have resulted in "low pay and gross inequities in salary."

Master's degree candidate and student council member Janet Ector agrees. "In my opinion, the so-called leadership was more interested in real estate speculation and other financially questionable acts to care about providing students with services or faculty with adequate resources."

As it stands, no official announcement has been made about what programs will be cut, so students and faculty continue to function in the dark. The action plan states that New College is committed to maintaining the School of Law, the School of Graduate Psychology and the School of Humanities BA program, but the survival of the school itself is contingent on whether WASC agrees to prolong probation. With the accreditation now lost, the final verdict awaits.

"The college will either survive in some form or it will go the way of other progressive colleges that have closed. The sad part is that New College is beloved. Students still want to come here form all over the country. And faculty—tired and hungry as we are—still want to teach here," says Cooke.

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