Super Tuesday has ended with significant victories for Donald Trump, and his opponents are starting to focus their attacks as he emerges as the clear Republican frontrunner. One issue that is getting some attention is “Trump University,” which is the subject of several lawsuits alleging fraud and other deceptive practices.
Here’s some background. Donald Trump founded “Trump University” in 2005 as a for-profit venture that offered courses and trainings (online and in-person) to teach people about real estate, asset management, entrepreneurship, and wealth creation. The “University” was never accredited as a formal college or university (despite the name), it doesn’t have a campus, and it has never conferred college credits or degrees. As a result, Trump University was eventually pressured to change its name to “The Trump Entrepreneur Initiative.”
Fast forward to today, and Trump University is now the subject of at least two major lawsuits: one by the New York Attorney General, and a class action lawsuit in San Diego by former students. In a recent ruling inthe New York case, a four-judge panel of the state Appellate Division unanimously decided (over the objections of Trump’s legal team) that the case could proceed.
The complaints in both cases make similar allegations that Trump University defrauded its students and attendees. Some of the specific charges include the following:
- Students were deceived into believing that Trump University was a licensed and/or accredited educational institution, when it was not.
- Students were pressured to borrow a significant amount of money – in some cases, over $30,000 – to attend courses that offered minimal value.
- Students were encouraged to raise their credit limit or take other financially-risky moves to either pay for Trump University courses or engage in investment/real estate transactions.
- Students were instructed to engage in practices that were possibly illegal in some states.
- The program promised perks such as mentorship and apprenticeship opportunities which were never provided.
- Students were promised that instructors were “handpicked” by Donald Trump, but this turned out not to be the case. (In fact, the New York Attorney General alleges that most instructors had little relevant experience or expertise in the subject matter, and Trump largely did not participate in the creation or review of instructional material or curricula).
Trump has defended his University, claiming that most students found the courses useful and that the people who are complaining just want a refund. He filed a countersuit against one of his former students, alleging defamation.
These lawsuits against Trump University are active and ongoing, and can be viewed as part of a broader crackdown on for-profit institutions by state attorneys general and the U.S. Dept. of Education for allegedly deceptive practices. The lawsuits against Trump are unique, however, in that they quite clearly will be the subject matter of a concurrent presidential election. To my knowledge, this type of scenario is rather unprecedented.
Stay tuned for updates.