Trump University: Fraud Settlement After Defrauding Students of $40 Million
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Trump University was not a real university — it had no degree programs, no accreditation, and was not approved to use the word 'university' in New York. Students paid from $1,495 for a preview seminar to $35,000 for a 'Trump Elite' mentorship package. Former employees provided sworn declarations that they were instructed to aggressively upsell students to higher-priced programs and use high-pressure sales tactics. Student evaluation forms praised instructors at the time — but these were collected before students could assess outcomes. Former Trump University president Michael Sexton acknowledged the program was selling a brand, not education. Trump had selected none of the instructors himself, contradicting his marketing claims.
Overview
Trump University was not a university. It had no accreditation, no degree programs, and no legal right to use the word "university" in New York. It was a seminar business that sold students on the promise that they would learn Trump's real estate secrets from instructors Trump had personally selected.
He had not selected the instructors. The secrets were not his. The $35,000 mentorship package delivered phone calls with third-party coaches.
The settlement came ten days after the election he had just won.
The Marketing
Trump appeared in videos and promotional materials claiming he had handpicked the instructors. Internal documents and sworn testimony from Trump University's own president contradicted this. The instructors were hired through normal processes and received no particular training in Trump's specific methods.
The playbook given to instructors described high-pressure sales techniques: identify which students had credit cards, encourage them to raise credit limits, upsell aggressively. Elderly attendees at "free preview" seminars were pushed toward the $35,000 Elite package. The evaluation forms — which students filled out before the program concluded and outcomes could be assessed — showed high satisfaction at the time.
The Regulators
New York State told Trump University it was illegally using the word "university" and needed to stop. It continued operating under the name anyway, adding regulatory violations to fraud allegations. It operated for five years total.
The Settlement
Trump said publicly he would never settle. He called the lawsuits a nuisance. He attacked the judge's ethnicity when rulings went against him.
Ten days after winning the presidency, he settled for $25 million. His contribution from personal funds was approximately $1 million of the $25 million total. He admitted no wrongdoing.
Five thousand students received partial restitution for programs that had taken thousands or tens of thousands of dollars each.
Timeline
Sequence of events
May 23, 2005
Trump University launches — not an accredited institution
Trump University launches with marketing materials featuring Trump claiming to have handpicked instructors. The program is not accredited, offers no degrees, and is not authorized to use the word 'university' in New York. It will operate until 2010.
January 1, 2010
Trump University ceases operations
Trump University stops operating after five years. Approximately 5,000 students have paid between $1,495 and $35,000. Student complaints have accumulated and regulatory scrutiny has increased.
August 24, 2013
New York AG Schneiderman files $40M fraud suit
New York Attorney General Eric Schneiderman files a $40 million civil fraud lawsuit against Trump, Trump University, and related entities, alleging deceptive practices and false advertising targeting approximately 5,000 students.
January 1, 2015
Three class action lawsuits filed — federal courts
Three separate class action lawsuits are filed in federal court on behalf of Trump University students. Two are in Southern California, one in New York. They proceed in parallel with the NY AG case.
June 1, 2016
Trump attacks Judge Curiel — racist comments
Trump publicly attacks presiding Judge Gonzalo Curiel, claiming he cannot be fair due to his Mexican heritage. Curiel was born in Indiana. Paul Ryan calls it textbook racism. Trump maintains the attacks for weeks.
November 18, 2016
Trump agrees to $25M settlement — ten days after election
Ten days after winning the presidency, Trump agrees to settle all three Trump University lawsuits for $25 million. He admits no wrongdoing. He had previously publicly vowed never to settle. The settlement provides compensation to approximately 5,000 defrauded students.
Sources
- ↑ Trump Agrees to Pay $25 Million in Trump University Settlement — The New York Times
- ↑ Trump University settles fraud claims for $25 million — The Washington Post
- ↑ Trump settles Trump University fraud lawsuits for $25 million — The Associated Press
- ↑ Attorney General Schneiderman Announces Historic $25 Million Settlement with Trump University — New York Attorney General's Office
Verification