Trump University: Was It Worth Students' Money?

Former US President Donald Trump's for-profit Trump University, which ran from 2005 to 2010, was accused of scamming students out of millions of dollars. The university, which was not an accredited university or college, offered courses in real estate, asset management, entrepreneurship, and wealth creation. It was the subject of multiple investigations, lawsuits, and student complaints, with some students alleging that they were urged to use their savings and increase their credit card limits. Despite Trump's repeated denials of the allegations, he eventually settled all three lawsuits in 2016 for a total of $25 million.

Trump University's legal issues

Trump University, also known as the Trump Wealth Institute and Trump Entrepreneur Initiative LLC, was an American company that ran a real estate training program from 2005 to 2010. It was owned and operated by The Trump Organization. Despite its name, the organization was not an accredited university or college. It conducted three- and five-day seminars, often called "retreats", and used high-pressure tactics to sell them to its customers. It did not confer college credit, grant degrees, or grade its students.

Trump University faced significant legal issues, including multiple investigations, lawsuits, and student complaints, which ultimately led to its demise in 2011. The company became the subject of an inquiry by the New York Attorney General's office for illegal business practices, resulting in a lawsuit filed in August 2013. The National Review called the organization a "massive scam", and it was accused of defrauding students through misleading marketing and aggressive sales tactics.

The legal issues surrounding Trump University included:

• Allegations of false advertising and misleading marketing: Trump University claimed to offer a real estate investing program with instructors hand-picked by Donald Trump himself. However, in a 2012 deposition, Trump testified that he never selected the instructors, and the school's advertisements were later revealed to be misleading.
• Aggressive sales tactics and high-pressure sales environment: Trump University used high-pressure tactics to sell expensive seminars and programs to its customers, urging students to invest their savings and increase their credit card limits. The prices for these programs ranged from $1,495 to $35,000, with the majority of students paying $1,500 for a 3-day course.
• Violation of state education laws: In 2005, the New York State Department of Education sent a letter to Trump University, stating that they were violating state law by using the word "university" when they were not chartered as one and did not have the required license to offer live instruction or training. Despite promising to stop instructing students in New York, the organization was alleged to have continued its operations in the state.
• Racketeering and false claims: Trump University was accused of engaging in racketeering and making false claims about the quality and effectiveness of its programs. The New York Attorney General described it as a bait-and-switch scheme, misleading thousands of people to pay up to $35,000 to learn Trump's real estate investment techniques.
• Operating without a required business license: In October 2014, a New York judge found Trump personally liable for operating Trump University without the necessary business license.
• Defamation and SLAPP lawsuits: Trump University filed a counterclaim against a former student, Tarla Makaeff, alleging that she had made defamatory statements causing losses of over $1 million. Makaeff countered that this was a strategic lawsuit against public participation (SLAPP) intended to intimidate her, and the court ultimately ruled in her favor, dismissing the defamation claim.
• Inappropriate political involvement: During his primary campaign speeches, Trump repeatedly criticized the judge handling the case, Gonzalo P. Curiel, describing him as a "hater" and referring to his ethnicity. These comments raised concerns about the potential impact on judicial independence and impartiality.

As a result of these legal issues, Trump University faced multiple lawsuits and negative publicity. Ultimately, Trump settled all three lawsuits in November 2016 for a total of $25 million after being elected president. The settlement included $21 million for the participants in the class actions, $3 million for New Yorkers not covered by the class actions, and a penalty of up to $1 million assessed by the state of New York for running an unlicensed university.

Student complaints and lawsuits

Trump University, also known as the Trump Wealth Institute and Trump Entrepreneur Initiative LLC, was an American company that ran a real estate training program from 2005 to 2010. It was owned and operated by The Trump Organization. Despite its name, the organization was not an accredited university or college. It conducted three- and five-day seminars, often called "retreats", and used high-pressure tactics to sell them to its customers. It did not confer college credit, grant degrees, or grade its students.

In 2011, the company became the subject of an inquiry by the New York Attorney General's office for illegal business practices, which resulted in a lawsuit filed in August 2013. An article in the National Review called the organization a "massive scam".

Trump University was the defendant in three lawsuits: a federal class-action suit alleging consumer violations, a federal class-action racketeering case, and a New York state civil suit brought by New York Attorney General Eric Schneiderman. All three lawsuits centered around allegations that Trump University defrauded its students by using misleading marketing practices and engaging in aggressive sales tactics.

Former customers said they were misled by advertisements that claimed Donald Trump had hand-picked instructors for the program and that they would learn tricks to be successful that were used by Trump himself. In reality, Trump testified in a 2012 deposition that he never selected the instructors. These tricks included using the real estate website Trulia.com to search for properties and learning about tax deductions on the Internal Revenue Service's website.

Instructors urged students to use their savings and increase their credit card limits. While initial seminars were free of charge, top-tier programs cost up to $35,000. Though at that point more expensive than the average online bachelor's degree, Trump University did not award diplomas and was not an accredited university. In 2010, the New York Education Department warned Trump University that its use of the word "university" in its name violated state education laws.

The lawsuits against Trump University received renewed interest due to Trump's candidacy in the 2016 presidential election. Despite repeatedly insisting he would not settle, Trump settled all three lawsuits in November 2016 for a total of $25 million after being elected president. The settlement was paid not by Trump but by his Las Vegas hotel business partner, billionaire Phil Ruffin.

Misleading marketing and aggressive sales tactics

Trump University, also known as the Trump Wealth Institute and Trump Entrepreneur Initiative LLC, was an American company that ran a real estate training program from 2005 to 2010. It was owned and operated by The Trump Organization. Despite its name, the organization was not an accredited university or college. It conducted three- and five-day seminars, often called "retreats," and used high-pressure and misleading marketing tactics to sell them to its customers.

The company's original business plan focused on online education but quickly expanded to include live, in-person instruction. The instruction's focus was on real estate investing, with Trump claiming in advertisements, "I can turn anyone into a successful real estate investor, including you." The introductory seminar urged students to sign up for additional classes, ranging from $1,495 seminars to a $35,000 "Gold Elite" program. While not licensed as a college or using student loans, the operation used many of the same tactics as predatory colleges: preying on vulnerable populations, implying that the school offered a fast track to financial security, and creating the impression that the recruiter is a friendly advisor.

Trump University was the subject of two class actions in federal court and a lawsuit by the New York Attorney General's office, all of which centred on allegations of misleading marketing and aggressive sales tactics. The lawsuits alleged that Trump University defrauded its students and engaged in illegal business practices, including false claims and racketeering.

In November 2016, Trump settled all three lawsuits for a total of $25 million. The settlement specified that Trump did not admit any wrongdoing. Former students were eligible for a refund of up to 90% of the money they spent on courses.

Trump's plans for higher education

One of Trump's main proposals is to dismantle the US Department of Education, which would involve shifting regulatory power to individual states and reducing or eliminating funding for diversity and inclusion initiatives. This plan would also likely eliminate billions of dollars in scholarship funding for low-income students. While Trump would need congressional approval to completely eliminate the department, he may seek to reduce its responsibilities and funding.

Trump has also proposed changes to the accreditation process, which he calls the "secret weapon" for overhauling higher education. He wants to fire the current "radical left" accreditors and replace them with conservatives who will create standards that include "defending the American tradition and western civilization, protecting free speech, and removing all Marxist diversity, equity, and inclusion bureaucrats."

In addition, Trump has suggested taxing and fining university endowments to create a new online 'American Academy' that would offer free bachelor's degrees. This academy would be strictly non-political and free of "wokeness or jihadism."

Trump has also spoken out against student debt forgiveness plans and has proposed ending or reducing visas for students from "enemy nations." He has also vowed to "deport pro-Hamas radicals and make college campuses safe and patriotic again."

Other proposals include increasing congressional scrutiny of universities, particularly Ivy League and elite institutions, and cracking down on what he perceives as "Marxist Maniacs" and leftist ideology in higher education.

Trump's views on accreditation

Trump has been vocal about his views on accreditation, which are tied to his broader criticisms of higher education in the US. The former president has accused accreditation agencies of enforcing leftist ideologies, particularly through diversity, equity, and inclusion (DEI) standards. He has vowed to eliminate what he calls their "Marxist influence" on American campuses.

Trump's criticism of accreditation agencies aligns with longstanding conservative grievances about perceived left-wing biases within higher education. He argues that these agencies mandate policies that elevate DEI over educational quality, resulting in the "indoctrination" of students with liberal ideologies. According to Trump, this hinders the representation of conservative viewpoints on campus and creates an environment hostile to free speech.

In line with these views, Trump has proposed a free, online university called "The American Academy" or "American Academy." This institution would be federally funded and free of what he calls "wokeness and jihadism." Trump intends to fund this academy by taxing, fining, and suing large private university endowments.

Trump's proposal for The American Academy is part of his broader plan to overhaul the US higher education system. He has also called for new accreditation standards, suggesting removing diversity, equity, and inclusion administrators, and promoting the defence of "American and Western civilisation" in school curricula.

During his previous term, Trump took steps to alter the accreditation system. Under then-Secretary of Education Betsy DeVos, his administration relaxed regulations, allowing institutions greater choice in selecting their accreditors. They removed the requirement for accreditor approval when implementing significant changes, such as launching new degree programs or modifying curricula.

Critics of Trump's approach argue that his reforms risk undermining academic quality in favour of political gains. They warn that shifting accreditation's focus from quality assurance to ideological alignment may compromise the credibility of US higher education.

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