Magneto, now going by the name "Michael Xavier", Charles' cousin, isn't able to do much about this, and, after much consideration, takes Emma Frost up on her offer of taking the students off his hands. He closes down the school, with only Dani and Warlock refusing to leave. The X-Men are still in San Francisco, otherwise they'd surely put a stop to this.
I think we're supposed to reckon Emma is causing all this, especially once Empath is found lurking around the school grounds, using his powers to forcibly rpslash Sharon and Tom. At the Massachusetts Academy, we find out it is instead real damage from the Beyonder, as Empath simply can't work on them, and Emma fixes the kids at least part of the way.
Meanwhile, Magneto is wondering whether he did the right thing, Dani goes to visits her parents, and then Sharon and Tom turn up, almost dead, reporting what Empath did to them. Magneto decides that he'd been emotionally manipulated too, and sets off to rescue the kids.
Emma sees this coming, and via her local police force summons the Avengers, here consisting of Captain America, Wasp, Black Knight (Dane Whitman), Hercules, Namor and Captain Marvel (Monica Rambeau), and tells them the mutant terrorist Magneto is planning on abducting some of her students. In doing so, she sort of gives herself away to the Avengers, as they realise that the only reason Magneto might be interested in them is if they are mutants. Anyway, Avengers and Magneto fight, but the New Mutants - who have been partly fixed by Emma, show loyalty to Magneto and defend him. The Avengers are at least temporarily persuaded of his reform, and allow him to leave with the students. As does Frost - she knows she can't hold them against their will, and gets some brownie points for next round by not trying.
The story has a detached mood matching its subject material, and it's not immediately obvious what is happening or is motivating any of the characters. I'm not entirely convinced by the ending: but I guess Emma can't be as much as a hardass as we'd been led to believe.