Trump University: Fraud Allegations and Legal Settlements (2025 Update)

Overview of Trump University

Launched on May 23, 2005, Trump University was a for-profit real estate training program founded by Donald J. Trump, Michael Sexton, and Jonathan Spitalny, marketed as a gateway to Trump’s business acumen. Promising to teach students his “secrets” to wealth via seminars and mentorships, it operated until 2010 amid growing scrutiny. By 2013, allegations of fraud surfaced, with critics claiming it misled thousands of students through false promises and predatory tactics, tainting Trump’s business reputation as he re-entered the presidency on January 20, 2025.

Fraud Allegations

Multiple lawsuits targeted Trump University, with plaintiffs alleging a pattern of deceptive practices:

• Misleading Advertising: Marketing touted mentorship by Trump and “handpicked experts,” yet Trump had no role in selecting instructors—many were unqualified salespeople with scant real estate experience.
• False Promises: Ads claimed insider access to Trump’s investment strategies, but he was minimally involved, appearing only in promotional videos; course content relied on generic materials.
• High-Pressure Sales: Students faced aggressive upselling—e.g., $1,495 seminars led to pitches for the $34,995 “Gold Elite” program—often draining savings or maxing credit cards.
• No Accreditation: Branded a “university,” it lacked educational accreditation, operating as Trump Entrepreneur Initiative after a 2010 New York order to drop the term.

Over 7,000 students enrolled, with complaints alleging losses up to $35,000 each.

Legal Actions and Settlement

On August 26, 2013, New York AG Eric Schneiderman (not Letitia James, who took office in 2019) sued Trump University for $40M, calling it a “bait-and-switch” scheme (People v. Trump Entrepreneur Initiative, Index No. 451463/2013). Two class-action suits followed: Low v. Trump University (California, 2010) and Makaeff v. Trump University (federal, 2010). On November 18, 2016—10 days after Trump’s election—the cases settled for $25M: $21M to students, $4M in penalties, finalized April 2018. Students recovered ~90% of fees (e.g., $1,350 for a $1,495 course), with 3,730 claims paid by 2019. Trump admitted no wrongdoing.

Trump’s Defense and Public Statements

Trump initially fought the suits, tweeting in 2013, “Lightweight NY AG’s case is a political hit job.” Post-settlement on November 18, 2016, he said, “I settled to focus on running the country,” denying fraud and touting a “98% approval rating” from students—a figure disputed by plaintiffs. In 2025, amid his second term, supporters still defend him, citing the lack of admission as vindication.

Impact of the Case

The Trump University saga, costing ~5,000 students an estimated $40M+, remains a cornerstone of fraud allegations against Trump. A February 15, 2025, Forbes retrospective called it a “textbook overpromise,” fueling skepticism of his business ethics as he governs. A March 5 NYT op-ed tied it to his $453.5M NY civil fraud penalty, noting parallels in inflated claims. Opinions split—some see it as proof of deceit, others as settled non-issue—underscoring its lasting mark on his legacy.