Trump University: Student Money-Makers Or Money Takers?

Trump University, an American company that ran a real estate training program from 2005 to 2010, was the subject of multiple lawsuits and complaints. The company offered courses in real estate, asset management, entrepreneurship, and wealth creation. Despite its name, the organization was not an accredited university or college. It conducted seminars and used high-pressure tactics to sell them to its customers. Many students paid out large sums of money for lessons from so-called experts hand-picked by Trump, with the promise that they would make a million dollars in a year. However, many never made any profits and instead found themselves in debt. As a result of the lawsuits, a settlement of $25 million was reached, and students were able to get a refund of up to 90% of the money they spent on courses.

Students paid up to $35,000 for courses

The courses were marketed as a way for students to learn Trump's real estate investment techniques and become successful real estate investors. The "Gold Elite" program, which cost $35,000, was the most expensive course offered by Trump University. Records indicate that about 1,000 tickets were sold for the silver, gold, or elite mentored courses, which ranged in price from $10,000 to $35,000.

Many students who paid for these expensive courses did not make any profits and were left struggling under debt. They had been persuaded to max out their credit cards during high-pressure sales talks to pay for the courses.

Trump University was the subject of multiple investigations, lawsuits, and student complaints, eventually ceasing operations in 2011. In 2016, Trump settled three fraud cases against him for a total of $25 million, including restitution and fines. Former students were able to receive refunds of up to 90% of the money they spent on courses.

Many students never made profits and struggled with debt

Many students who attended Trump University were lured by the promise of learning how to get rich quickly in the real estate business. However, instead of making profits, many of them ended up in debt.

Trump University, which was owned and operated by The Trump Organization, offered courses in real estate, asset management, entrepreneurship, and wealth creation. It was founded in 2004 by Donald Trump, Michael Sexton, and Jonathan Spitalny, and it ran from 2005 to 2010. Despite its name, it was not an accredited university or college. Instead, it conducted three- and five-day seminars, often called "retreats," that were held in rented spaces such as hotel ballrooms.

The cost of these seminars ranged from $1,495 to a $35,000 "Gold Elite" program. Many students paid out $35,000 for lessons from so-called experts "hand-picked" by Trump. However, instead of learning how to make millions, as advertised, many students ended up in debt. Some students even maxed out their credit cards during persuasive sales talks to pay for the courses.

In addition to the high costs, Trump University was also the subject of multiple investigations, lawsuits, and student complaints. It was accused of defrauding its students by using misleading marketing practices and engaging in aggressive sales tactics. 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 2013. The lawsuit alleged that Trump University engaged in "persistent fraudulent, illegal and deceptive conduct."

As a result of these issues, Trump University ended up settling three fraud cases for a total of $25 million. This settlement allowed thousands of students to get most of their money back. However, it is important to note that Trump had pledged not to settle and had insisted that he would fight the cases in court. It was only after he won the 2016 election that his lawyers settled the cases on his behalf.

Trump settled three fraud cases for $25 million

Trump University, an American company that ran a real estate training program from 2005 to 2010, was owned and operated by The Trump Organization. Despite its name, it was not an accredited university or college. It offered courses in real estate, asset management, entrepreneurship, and wealth creation.

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. The company was accused of false advertising and engaging in aggressive sales tactics.

Trump University was also the subject of two class actions in federal court. The lawsuits alleged that Trump University defrauded its students by using misleading marketing practices and engaging in high-pressure sales tactics.

In November 2016, after being elected president, Donald Trump settled all three fraud cases for a total of $25 million. The settlement included restitution and fines, with $21 million going to the participants in the class actions and $3 million to New Yorkers not covered by the class actions. A penalty of up to $1 million was also assessed by the state of New York for running an unlicensed university.

The settlement was a stunning reversal by Trump, who had pledged not to settle and had vowed to fight the cases all the way to court. The settlement meant that thousands of students who had attended the expensive seminars would finally get most of their money back.

Instructors were not hand-picked by Trump as he claimed

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.

In an infomercial, Trump claimed he hand-picked Trump University's instructors. However, in a 2012 deposition, he testified that he never selected the instructors. According to Michael Sexton, who created the business plan for the real estate training program, Trump signed off on the school's advertisements. Sexton also admitted that "none of our instructors at the live events were hand-picked by Donald Trump".

In reality, many candidates for instructor positions at Trump University came directly from other seminar companies, where they worked as motivational speakers or sales representatives. Some had gone bankrupt investing in real estate, and others had little to no experience in the field.

Trump University instructors often told audiences that they had been chosen personally by Trump to be instructors. For example, in a 2009 presentation, Melvin Rich stated:

> Just so you guys know, tonight, the reason that I was flown here by Mr. Trump in Trump University is to train you guys is [sic] because I have been successfully investing in real estate for the last eight years. I have also taught thousands of people all across the country and Great Britain how to invest in real estate successfully. So, this is why Mr. Trump picked me to come out here and train with you guys…

However, Trump did not hand-pick Melvin Rich; in fact, he did not even know whether Rich worked at Trump University, much less that he was an instructor.

In short, it is clear that the Trump University instructors never met Trump, and that Trump did not know any of them, based on his sworn answers in deposition. These individuals were not “terrific” or “successful” or the “best of the best,” as Trump claimed. His statements in the promotional video seem to have been a sales tactic used to lure people into shelling out thousands of dollars.

Trump University was not an accredited university

Despite its name, Trump University did not confer college credit, grant degrees, or grade its students. It conducted three- and five-day seminars, often called "retreats," and used high-pressure tactics to sell them to customers. 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 multiple lawsuits and eventually led to its closure in 2011.

Trump University was accused of defrauding its students by using misleading marketing practices and engaging in aggressive sales tactics. The lawsuits alleged that the company falsely claimed that Trump had "hand-picked" the instructors and that students would learn his real estate investment techniques. In reality, there were no secrets, only high-pressure sales tactics used to sell expensive seminars.

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 company changed its name to "The Trump Entrepreneur Initiative" in June 2010 but continued to face legal troubles.

In November 2016, Trump settled three lawsuits against him and Trump University for a total of $25 million. The settlement was reached just days before one of the cases was scheduled to go to trial. Trump did not admit any wrongdoing as part of the settlement, but former students were able to receive refunds of up to 90% of the money they spent on courses.

Frequently asked questions