Janice Lozano
Trump University, an American company that ran a real estate training program from 2005 to 2010, faced multiple investigations, lawsuits, and student complaints. Three lawsuits were filed, asserting that the organisation engaged in illegal business practices, false claims, and racketeering. Two were federal class actions: one against Trump University and its managers, and one against Donald Trump personally. A third case was filed in New York State court. The lawsuits centred on allegations that Trump University defrauded its students through misleading marketing practices and aggressive sales tactics.
While the exact number of students involved in the lawsuits is unclear, it is estimated that around 6,000 to 7,000 former students were covered by the settlement agreement. These students will receive a refund of up to 90% of the money they spent on courses.
| Characteristics | Values |
|---|---|
| Number of students involved in the lawsuit | Around 7,000-8,000 |
| Number of students covered for damages under the settlement agreement | 6,000 |
| Number of students who submitted claims to receive payment through the settlement | Over 3,700 |
What You'll Learn
The number of students involved in the lawsuit
The number of students involved in the Trump University lawsuit is estimated to be around 7,000 to 8,000. This includes the participants in the class-action suits, as well as those covered by the settlement agreement. The settlement agreement covered damages for 6,000 students who were defrauded by Trump University, with approximately 3,700 of them submitting claims to receive payment.
The lawsuits against Trump University were filed by former students who claimed they were misled and scammed out of thousands of dollars by the organisation. The lawsuits centred on allegations of deceptive practices, false claims, and racketeering. Trump University was found to be engaging in high-pressure sales tactics and aggressive marketing strategies to lure customers into purchasing their real estate and business programs.
The settlement for the lawsuits was finalised and approved by a federal judge in April 2018, with former students eligible to receive up to 90% refunds for the money they spent on courses.
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The nature of the lawsuit
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 and founded by Donald Trump, who was U.S. president from 2017 to 2021 and elected again in 2024, and his associates Michael Sexton and Jonathan Spitalny.
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 also the subject of two class actions in federal court. The lawsuits centered around allegations that Trump University defrauded its students by using misleading marketing practices and engaging in aggressive sales tactics.
The lawsuits alleged that Trump University engaged in a variety of illegal business practices, including false claims and racketeering. Two were federal class actions: one against Trump University and its managers, including Trump, and one against Trump personally. A third case was filed in New York State court.
The New York State Department of Education had sent Trump, Sexton, and Trump University a letter in 2005, saying that they were violating state law by using the word "university" when Trump University was not actually chartered as one and did not have the required license to offer live instruction or training.
On August 24, 2013, the State of New York filed a $40 million civil suit against Trump University, alleging illegal business practices and false claims made by the company. According to New York Attorney General Eric Schneiderman, Trump University was a bait-and-switch scheme that misled more than 5,000 people to pay up to $35,000 to learn Trump's real estate investment techniques.
Trump denied the allegations, claiming the school had a 98% approval rating, and said Schneiderman was "a political hack looking to get publicity". He filed a complaint alleging that Scheiderman's investigation was accompanied by a campaign donation shakedown; a New York ethics board investigated the complaint and dismissed it in August 2015.
In addition to the New York lawsuit, there were two federal class-action lawsuits: Low v. Trump University, LLC and Cohen v. Trump.
Tarla Makaeff, who paid nearly $60,000 to Trump University in 2008, brought the Low v. Trump University, LLC suit on April 30, 2010, in the U.S. District Court for Southern California. The suit sought refunds for Makaeff and other former clients of Trump University, as well as punitive damages for breach of contract, fraud, negligent misrepresentation, and bad faith. It did not originally name Donald Trump as a defendant but did so in a later amended complaint.
On October 18, 2013, California businessman Art Cohen filed the Cohen v. Trump suit in the U.S. District Court for Southern California, as a class action on behalf of consumers throughout the United States who purchased services known as "Live Events" from Trump University after January 1, 2007. It alleged violations of the RICO statute, essentially a scheme to defraud, and accused Trump of misrepresenting Trump University to make tens of millions of dollars while delivering "neither Donald Trump nor a university".
The lawsuits against Trump University and the subsequent settlement shone a light on Trump's business practices and raised questions about his ethics and willingness to take advantage of people for his own profit.
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The outcome of the lawsuit
The settlement saw $21 million go to the participants in the class actions, $3 million to 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. The settlement also specified that Trump did not admit any wrongdoing.
The settlement was paid by Trump's Las Vegas hotel business partner, billionaire Phil Ruffin.
> a stunning reversal by Donald Trump and a major victory for the over 6,000 victims of his fraudulent university.
Trump himself said he settled:
> for a small fraction of the potential award because I am too busy as president-elect to take it to trial. The ONLY bad thing about winning the Presidency is that I did not have the time to go through a long but winning trial on Trump U. Too bad!
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The allegations made by students
Trump University, founded in 2004 by Donald Trump, Michael Sexton and Jonathan Spitalny, was an American company that ran a real estate training program from 2005 to 2010. Despite its name, it was not an accredited university or college. It did not confer college credit, grant degrees, or grade its students. The company 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 lawsuits centred around allegations that Trump University defrauded its students by using misleading marketing practices and engaging in aggressive sales tactics.
- Misleading marketing practices: Students alleged that they were pushed into enrolling in real estate and business programs through high-pressure sales tactics and scammed out of thousands of dollars. They claimed that Trump University used misleading marketing practices, such as advertisements stating that Donald Trump had "hand-picked" instructors for the program and that students would learn tricks to be successful that were used by Trump himself.
- Aggressive sales tactics: Students also alleged that Trump University employed aggressive sales tactics, such as encouraging customers to max out their credit cards and push them to call their credit card companies to ask for a credit limit increase.
- False claims: Students claimed that Trump University made false claims, such as promising to use "hand-picked" instructors to teach success in real estate and claiming that the program had a 98% approval rating.
- Deceptive practices: In addition, students alleged that Trump University engaged in deceptive practices, such as providing misleading information about the nature of the programs and the qualifications of the instructors.
- Racketeering: The lawsuits also included allegations of racketeering, claiming that Trump University engaged in a scheme to defraud students out of money.
As a result of these allegations, three lawsuits were filed against Trump University and Donald Trump personally. The lawsuits were class-action suits, allowing multiple students to join together in the legal action. The students sought refunds, punitive damages, and compensation for their losses.
In total, about 7,000-8,000 former students were eligible for compensation under the lawsuits, and Trump University and Donald Trump eventually settled the cases for $25 million in November 2016.
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The response from Trump and his team
Trump and his team denied any wrongdoing and said that the school had a 98% approval rating. Trump called the New York Attorney General, Eric Schneiderman, "a political hack looking to get publicity". He also filed a complaint alleging that Schneiderman's investigation was accompanied by a campaign donation shakedown. A New York ethics board investigated the complaint and dismissed it in August 2015.
Trump also claimed that the instructors at Trump University were hand-picked by him and were the "best of the best". However, in his deposition, he testified that he never selected the instructors.
During his election campaign, Trump said that the judge in the case, Gonzalo P. Curiel, could not be impartial because of Trump's campaign pledge to build a wall on the U.S.-Mexico border to control illegal immigration. Trump repeatedly called the judge a "hater" and described him as "Spanish" or "Mexican".
Trump eventually settled all three lawsuits in November 2016 for a total of $25 million. He said he settled "for a small fraction of the potential award" because he was too busy as president-elect to go through a long trial.
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Frequently asked questions
About 7,000 former students were eligible to submit claims to receive payment through the settlement.
The students claimed they were bilked out of millions of dollars by the real estate program.
Trump settled all three lawsuits in November 2016 for a total of $25 million.
The lawsuits centered around allegations that Trump University defrauded its students by using misleading marketing practices and engaging in aggressive sales tactics.
