Presidential candidate Donald Trump dabbled in higher education—opening a for-profit "university"—but the venture resulted in two lawsuits against the company.
The real estate mogul opened Trump University in 2005, billing it as a way to learn lessons from the man himself. But a 2013 class action lawsuit pending in California and another brought by the New York attorney general challenge that claim.
Plaintiffs in the California lawsuit, who are seeking $40 million in damages, accuse Trump's program of luring—and defrauding—5,000 "student-victims." Court documents say students were promised mentoring from Trump and a chance to appear on his television program, "The Apprentice."
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Students were also told to max out their credit cards and clear their 401ks because they would earn enough back from investments to pay the bills and fully fund their retirements. A large percentage of students were senior citizens.
The plaintiffs allege, however, that third-party providers and a school official with no real estate background created the course materials. Faculty members were actually "high-pressured salespeople hired as independent contractors and paid commissions for sales."
The California case allegations are "totally lacking in any merit," says Alan Garten, Trump's lawyer, pointing out that 98% of the 11,000 students awarded the program four or five stars in their evaluations. Trump was involved in curriculum development and personally chose the faculty, Garten says.
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The New York lawsuit, currently awaiting trial, also alleges the company made false claims regarding its classes.
Since 2010, the program has been called the "Trump Entrepreneur Initiative." New York's Education Department demanded Trump stop referring to it as a university because it was unaccredited, unlicensed, and offered no degrees (Conlin/Smith, Reuters, 7/23; Thomason, "The Ticker," Chronicle of Higher Education, 7/23).
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