Ibrahim Gardner
In 2013, New York Attorney General Eric Schneiderman filed a lawsuit against Trump University, a for-profit school founded by Donald Trump, accusing the institution of defrauding over 5,000 students nationwide. The lawsuit, in the amount of $40 million, alleged that Trump University employed predatory tactics, such as preying on vulnerable populations and implying that the school offered a fast track to financial security. The school was also found to be operating without the required license, as it was not chartered as a university and lacked the necessary authorization to provide live instruction or training. This led to a ruling by a New York judge holding Trump personally liable for the school's illegal business practices.
| Characteristics | Values |
|---|---|
| Number of students suing Trump University | 5,000+ |
| Price of courses | $1,495 - $35,000 |
| Number of tickets sold | 7,611 |
| Number of lawsuits | 3 |
| Number of class actions | 2 |
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What You'll Learn
Students pressured to give positive reviews
Although Trump claimed that students gave the program 98% favorable reviews, former students of Trump University have spoken out about the pressure they felt to give positive feedback. In interviews and documents published by The New York Times, students reported that they were coerced into providing positive reviews.
One student, Robert Guillo, claimed that he gave a glowing endorsement of the program after a teacher begged him to, saying that without it, "Mr. Trump might not invite me back to teach again." Jeffrey Tufenkian's high ratings, meanwhile, were a result of his Trump University-assigned mentor refusing to leave the room until he gave excellent ratings. John Brown said that employees of Trump University called him multiple times, pushing him to raise his poor review of the program. “I finally gave in,” he later testified.
These allegations are supported by "playbooks" documenting instructions for employees to use a hard-sell approach, as well as depositions in which former employees said that Trump University had defrauded or lied to its students. Despite these claims, Daniel Petrocelli, a lawyer for Trump, insisted that "folks were not coerced."
Trump University was the subject of multiple lawsuits, with former students accusing the organization of defrauding them with misleading marketing practices and engaging in aggressive sales tactics. The company was also investigated for illegal business practices, resulting in a lawsuit filed in 2013. Trump settled all three lawsuits in November 2016 for a total of $25 million after being elected president.
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Trump University not a licensed college
Trump University, also known as the Trump Wealth Institute and Trump Entrepreneur Initiative LLC, was an American company founded in 2004 by Donald Trump and his associates Michael Sexton and Jonathan Spitalny. It was owned and operated by The Trump Organization. Despite its name, the organization was not an accredited university or college, and was not licensed as such.
In 2005, the New York State Department of Education sent a letter to Trump, Sexton, and Trump University stating that they were violating state law by using the word "university" when Trump University was not chartered as one and did not have the license to offer live instruction or training. In response, Sexton promised to stop instructing students in New York, but the New York Attorney General alleged that the instruction continued.
In March 2010, Deputy Commissioner for Higher Education Joseph Frey sent a letter to Trump stating that the use of the word "university" was misleading and violated New York Education Law and the Rules of the Board of Regents. As a result, in June 2010, Trump University changed its name to "The Trump Entrepreneur Initiative".
Trump University offered courses in real estate, asset management, entrepreneurship, and wealth creation. Its real estate training program ran from 2005 to 2010. The courses ranged from $1,495 seminars to a $35,000 "Gold Elite" program. Records indicate that about 7,611 tickets were sold to customers, with 6,000 of these for a $1,500 3-day course, and 1,000 for silver, gold, or elite mentored courses ranging from $10,000 to $35,000.
Trump University has been criticized for using high-pressure tactics to sell its seminars and for preying on vulnerable populations. In 2011, amid multiple investigations, lawsuits, and student complaints, it ceased operations. Three lawsuits were filed against Trump University, alleging illegal business practices, false claims, and racketeering. Two were federal class actions, and one was filed in New York State court.
During the 2016 Republican presidential primaries, Trump's opponents criticized him for Trump University, with Mitt Romney calling him "a phony, a fraud". Trump defended himself by stating that student evaluations were overwhelmingly positive and that lawsuits were a routine part of business.
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Students charged up to $35,000 per course
Trump University, founded by Donald Trump, charged students up to $35,000 per course for what was called the "Gold Elite" program. The for-profit school was not licensed as a college, nor could students take out student loans to attend, but it used many of the same tactics as predatory colleges. These included preying on vulnerable populations, implying that the school offered a fast track to financial security, and creating the impression that recruiters were friendly advisors.
The introductory seminar, which typically took place in rented spaces such as hotel ballrooms, urged students to sign up for additional classes. These ranged from $1,495 seminars to the $35,000 "Gold Elite" program. Records indicate that 7,611 tickets were sold to customers attending courses. About 6,000 of these were for a $1,500 3-day course, and 1,000 were for silver, gold, or elite mentored courses ranging in price from $10,000 to $35,000.
In 2013, New York Attorney General Eric Schneiderman filed a $40 million lawsuit against Trump, accusing him of defrauding more than 5,000 people nationwide through Trump University. The lawsuit asserted that Trump University, later known as the Trump Entrepreneur Initiative, misrepresented itself and bilked students out of thousands of dollars.
Trump University was also the subject of criticism during the 2016 Republican presidential primaries. Opponents of Trump, including Mitt Romney, Ted Cruz, and Marco Rubio, referred to it as a "scam" and a "phony". In response, Trump claimed that student evaluations were overwhelmingly positive and that lawsuits were a routine part of business. Despite these claims, former employees and students came forward with allegations of fraud and pressure to give favorable reviews.
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Trump University was a small business
Trump University was an unaccredited educational initiative owned and operated by The Trump Organization. It was incorporated in 2004 as a New York limited liability company, with Trump owning 93% of the business. The university offered courses in real estate, asset management, entrepreneurship, and wealth creation.
Despite Trump's claims that student evaluations were overwhelmingly positive, multiple investigations, lawsuits, and student complaints surfaced during its operation. In 2011, the New York Attorney General's office launched an inquiry into illegal business practices, and in 2013, a lawsuit was filed. Trump University was the subject of two federal class actions and a state court case in New York, with allegations of misleading marketing and aggressive sales tactics.
Trump himself referred to Trump University as "a small business" during the 2016 Republican presidential primaries. He defended the university, stating that lawsuits were routine and that student evaluations were positive. Trump settled all three lawsuits in 2016 for a total of $25 million, with former students eligible for refunds of up to 90% of their course fees.
While the exact number of students suing Trump University is unclear, the settlement was described as a victory for the over 6,000 victims of the fraudulent university. Records indicate that Trump University sold 7,611 tickets to customers, with about 6,000 of these being for a $1,500 3-day course. The high prices for seminars and programs were justified as encouraging students to take personal responsibility for their work, rather than enriching Trump.
In summary, Trump University, though unaccredited and facing legal scrutiny, operated as a small business venture with a focus on real estate education. It encountered significant criticism and legal challenges, resulting in a settlement for defrauded students.
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Trump University defrauded students
Trump University was incorporated in 2004 as a New York limited liability company, with Trump owning 93% of the company. Despite its name, the organization was not an accredited university or college. It did not confer college credit, grant degrees, or grade its students. Instead, it conducted three- and five-day seminars, often called "retreats," which were sold to customers using high-pressure tactics.
The company was the subject of multiple lawsuits and investigations, including a 2011 inquiry by the New York Attorney General's office for illegal business practices, which resulted in a lawsuit filed in 2013. The lawsuits centered on allegations that Trump University defrauded its students by using misleading marketing practices and engaging in aggressive sales tactics. In 2016, a court found that there was a genuine issue of fact regarding the plaintiffs' claims of deceptive practices and misrepresentation in advertisements, allowing these claims to proceed to trial.
Trump University employees were instructed to use a hard-sell approach to sell the seminars, which ranged from $1,495 to $35,000. While Trump claimed that students gave the program 98% favorable reviews, former students alleged that they were pressured to give positive feedback. The company was also accused of preying on vulnerable populations and creating the false impression that recruiters were friendly advisors.
In 2021, a federal appeals court upheld an agreement requiring Trump to pay $25 million to settle lawsuits accusing Trump University of fraud. The settlement resolved claims that the university pressured students to spend large sums of money but failed to deliver on promises to teach them how to succeed in real estate. About 3,730 people were expected to receive at least 90% of their money back under the deal.
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Frequently asked questions
It is not clear how many students are suing Trump University, but records indicate that 7,611 tickets were sold to customers attending courses. About 5,000 people were allegedly defrauded by the university, according to a lawsuit filed by the New York State attorney general's office.
The lawsuit was filed on the basis that Trump University, which was not a licensed university, misrepresented itself and defrauded its students. The New York State Department of Education had informed Trump University in 2005 that they were violating state law by using the word "university".
Trump has said that lawsuits are a routine part of business and that he wins most of them. He also said that he could settle the lawsuit for very little money but doesn't want to do it out of principle.
