In addition to starring, Franco also directed and served as an executive producer on the HBO series about the porn industry in NY in 1970s.
Hilary Dusome was under Franco's tutelage in 2012 and said at first she found him to be "a really generous spirit".
Vince Jolivette, Franco's production partner who helped run the school, said he would investigate the matter.
Natalie Chmiel, another selected student, and Dusome described what was a hostile set to the LA Times.
Franco sparked criticism for wearing a Time's Up badge in support of the movement against sexual harassment at Sunday night's (7 January) awards ceremony, which prompted allegations against his own conduct. "I just thought I was being dramatic", she said.
Another student, Katie Ryan, took several classes at Studio 4. I don't want to shut them down in any way.
"You're not curious enough to reach out to her, as someone that you've had a good relationship with before to try to understand why she would have done that?" he asked, to which James replied: "I don't know, it was just so shocking, I don't know". She said that, while she initially signed nudity agreements for the film, Franco asked her to film some unscripted nude scenes, including one orgy scene where Franco removed the plastic guard covering the actors' vaginas as he continued to simulate oral sex.
"The things that I heard on Twitter are not accurate", he also said. She told the LA Times that she had asked Franco "can we do this later?", but that "he was kind of nudging my head down, and I just didn't want him to hate me, so I did it".
In the new report, five women have made accusations against him and he has categorically denied all of the allegations through his lawyer.
The admittance of a consensual relationship has prompted some to disbelieve her and like Sarah Tither-Kaplan, responded in a negative manner.
"I was talking to him, all of a sudden his penis was out", said Paley. Franco's attorney said the allegations are "not accurate".
"I feel there was an abuse of power, and there was a culture of exploiting non-celebrity women, and a culture of women being replaceable".
Paley said Franco's response is upsetting.
"The power dynamic was way off", she recalled. Franco then quickly left, she said.
Franco spoke with Colbert Tuesday night about claims on social media, some of which were from women also interviewed by the L.A. Times, that he behaved inappropriately. I don't accept, but maybe some other people's lives would be made easier if he donated all of his earnings from "The Disaster Artist" to @RAINN01.
Violet Paley dated James Franco and has accused him of sexual misconduct.