It's impossible to be certain, but all this giving your passport to the PSB is nonsense. The PSB aren't going to be interested in all this crap. Perhaps their only concern, since you're not going to stay in your job, is getting you out of the country. They're not going to be interested in helping the school to get their money from you - unless of course they have good links with the school, and / or have received lots of generous donations in the past.
The school have to give you the passport, but as to exactly how you can make them, that's a tricky question.
The fact remains though that if you're not working, then the PSB will want you to leave the country. You can't do that without your passport, so in effect the school are causing you to break the law, and causing an illegal alien to remain in the country.
I think the PSB are basically your 'friends' here. I dare say that they will try to put pressure on you to pay the money before you leave China, but your easy answer to that is that you don't have the money. Your family and friends are refusing to send you the money. I'm pretty damn certain the US embassy aren't going to lend you the money.
I think the fallout of all this may be that you won't be able to get another job in China. It's possible, not certain. There are blacklists, although that doesn't mean there's a definitive one, or many people look at them or even know they exist.
So, I suggest that you tell your school that unless they immediately hand over your passport, you are going to the PSB. Tell them you'll send them the money once you're back in the States. Tell them your parents will send them the money once their precious little son is back safe and sound.
They won't want you to go round to the PSB and make a fuss. They're BS-ing you. What are the PSB / Police going to do to you? Nothing, except make sure you leave China.
However, make sure that you notify your embassy before you go to the PSB, just in case. It would certainly be safer to take someone with you/ Where are you, Xian? You've deleted a lot of your earlier posts, so I can't remember if you're the children's fortress guy.
You're not the first to be in this position. The fact is that sometimes a new job in a new country turns into a car crash. Promise them that if they let you go nicely and quickly, you won't say a nasty thing about them on the internet ever.
I'm actually an honest person, but in this instance, a bit of dishonesty may help them save face. Also, your staying in the job for a couple of weeks while they try to find another teacher for the classes may help them save face with the parents. Don't just give them 'zero sum' solutions. They need to save face and feel that they have in some sense 'won'.
I wish you'd posted about your problems on the forum before 'going nuclear'. Certainly I understand the kind of problems you may be facing. You should have given it more time. But I'm not in your shoes, and although I cried myself to sleep the first few nights after moving abroad, I recognise that mine wasn't as bad as experiences get.