New College of California - Revocation of Accreditation and Financial Collapse

Revocation of Accreditation and Financial Collapse

In August 2007, Luis Molina, a former Board member with no other experience in leading educational institutions, was made Acting President of the college. Expectations that the Board would hire a new Interim President never materialized. Francisco Leite, a former university administrator from Brazil who Martin Hamilton met while contracting an exchange program with UNAES, became Chief Financial Officer. Though initially Martin Hamilton remained on the Board after he was forced to resign as President, he, along with Peter Gabel, was ultimately forced out. The interim administrators hired an educational consultant, whose efforts drew praise from the accrediting body and the faculty, to help bring the college into compliance with accreditation standards of the Western Association of Schools and Colleges (WASC).

In October 2007, without any notice, the administration stopped paying faculty and staff. Faculty continued teaching out the semester without pay. Law School faculty continued teaching through the spring semester based on false promises that pay would be forthcoming at the start of the semester. The College presently owes its faculty and staff millions of dollars in back pay. In July 2008, the college acknowledged its debts in agreements it signed to settle wage claim disputes filed with the Department of Industrial Relations. A number of creditors of the college have prevailed in lawsuits.

Accreditation was revoked in February 2008 by WASC for numerous violations, including lack of proper governing structure, failure to keep proper student records, and lack of oversight by the Board. WASC is the accrediting body for colleges and universities in California.

At the end of 2007, after discovering improprieties in the financial aid office, the Department of Education placed the college on "heightened cash monitoring," which meant that federal financial aid funds would only be disbursed after New College's paperwork passed a review. The financial aid staff hired by Molina and Leite were unable to fix the files, which were in complete disarray, to conform to DOE standards, and DOE investigation also revealed that the school failed to keep required records and could not account for large amounts of federal financial aid funds. As a result, DOE revoked New College's eligibility to receive federal financial aid funds.

Students of the New College of California School of Law transferred to John F. Kennedy University Law School in April 2008.

The college has entered into settlements agreeing to pay faculty and staff millions of dollars in back pay owed to them, but it has not complied with the agreements or paid any of the money owed.

Coordinates: 37°45′38″N 122°25′16″W / 37.7606°N 122.4212°W / 37.7606; -122.4212