Trump University Launches

The Pitch

Trump University was announced in 2004 and began operating in 2005, offering courses and seminars in real estate investing, entrepreneurship, and wealth creation. Despite its name, it was not an accredited university and did not grant degrees. Trump appeared in promotional materials promising that he had “hand-picked” the instructors and that students would learn his personal secrets to success in real estate.

“At Trump University, we teach success. That’s what it’s all about,” Trump said in one advertisement. The program offered free introductory seminars designed to upsell attendees into increasingly expensive courses, ranging from a $1,495 three-day seminar up to a $35,000 “Gold Elite” mentorship package.

What Students Got

According to court documents and testimony from former employees, the reality of Trump University bore little resemblance to its marketing. Former sales managers described a high-pressure operation designed to extract maximum fees from students, many of whom were retirees or people of modest means who were encouraged to increase their credit card limits to pay for courses.

The instructors were not “hand-picked” by Trump, and many had no significant real estate experience. Students who paid for the most expensive mentorship programs reported that their assigned mentors were unavailable or unqualified. Internal documents revealed that the sales team used a “playbook” with specific techniques for overcoming objections and closing sales, including instructions to identify students’ financial weaknesses and use emotional pressure.

Legal Consequences

In 2013, New York Attorney General Eric Schneiderman filed a $40 million lawsuit against Trump, alleging that Trump University had engaged in persistent fraud. Two class-action lawsuits were also filed in California by former students. Trump fought the cases aggressively for years, personally attacking the federal judge overseeing the California cases, Gonzalo Curiel, in comments that were widely condemned as racist.

In November 2016, just days after winning the presidential election, Trump agreed to pay $25 million to settle all three lawsuits without admitting wrongdoing. The settlement provided refunds to approximately 6,000 former students. The New York State Education Department had forced the operation to change its name to “The Trump Entrepreneur Initiative” in 2010 after determining it was illegally using the word “university.” The venture ceased operations in 2010.