DATE: Sunday, September 7, 1997             TAG: 9709070110

SECTION: LOCAL                   PAGE: B3   EDITION: FINAL 

SOURCE: BY PAUL CLANCY, STAFF WRITER 

DATELINE: VIRGINIA BEACH                    LENGTH:   70 lines

ARE TRUSTEES HAVE OFFERED A SETTLEMENT TO UNIVERSITY'S BOARD BUT ATLANTIC U.'S RESPONSE, IF ANY, IS UNKNOWN IN THE PHILOSOPHY DISPUTE.

The fate of one of the country's most unusual universities remains uncertain as two sides of a mystic's vision seek to resolve their differences or part company.

The board of trustees of the Association for Research and Enlightenment met last week to decide whether to accept the decisions of the rebellious board of Atlantic University or, literally, send the school packing.

The trustees decided to offer a settlement; as of Saturday night, it was unknown whether the university's board had responded to the proposal.

Officials of the small school, once a grand scheme of the celebrated clairvoyant Edgar Cayce, were originally ordered to leave ARE's premises last week.

Renewed discussions between AU and ARE stayed the verdict, with classes set to begin this week.

School officials said they were accepting registrations but had no idea where classes might be held.

``My fondest hope would be that we could stay put,'' said Frederick Kolb, chairman of the university's board of trustees. He added Friday, ``as far as we're concerned, any classes will go on as planned.''

But Kolb last week repeated the position of the AU board that it is prepared to leave the university's offices and classrooms at the ARE headquarters at 67th Street and Atlantic Avenue and find space of its own.

ARE board members were ``still talking about where we're going to go with this,'' said John Van Auken, a member of the association's board.

The dispute goes to the core of both organizations' philosophies. Both are founded on the vision of a small-town Kentucky photographer, devoutly Christian, who was ordinary in every way except for his reputed ability, while in a deep trance, to diagnose and prescribe treatment for people he never had met.

He was, followers say, a seer, a mystic whose extraordinary gifts warranted further study.

After Cayce was guided by a trance to move to Virginia Beach in 1925, both a hospital and a school were founded. Atlantic was to have a full-fledged university program, complete with sports and a marching band. Both school and hospital collapsed during the Depression.

ARE, founded in 1931, was housed in the old hospital. The complex now includes the hospital building, a meditation garden, and a visitor center and library that houses 14,000 of Cayce's ``readings.'' The association has more than 30,000 members worldwide.

AU was reborn in 1985 as a graduate school that awarded a master's degree in transpersonal studies, a blend of psychology, philosophy and research into psychic phenomena.

The school boasts close to 300 students, although nine out of 10 take the courses by correspondence. But all, as the university's flier states, ``share a desire to create a new inner vision.''

The school's budget of about $350,000 a year is met by tuition and gifts. ``We're in better shape than we've ever been,'' said Mary Haselton, the board's finance chairwoman. But Kolb acknowledged that a former school official overextended the university's line of credit.

There is a question of how the students could complete their courses of study.

``We have an obligation to 300 students to continue the program as it was set up,'' Haselton said.

The breakup results from the AU board's plan to move the school toward accreditation by the Southern Association of Colleges and Schools and its decision to hire a new president - at $210,000 over a three-year period - who was not a Cayce disciple.

ARE's board strongly disapproved. The board told Kolb and his fellow trustees that they must either surrender to a takeover by the ARE or ``pursue their vision as they see fit.'' In other words, they would have to leave and let ARE get on with its own educational programs.

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