That particular institution, of course, was recently embroiled in a class-action fraud lawsuit, which Trump settled 10 days after the election to the tune of $25 million (though he said on Twitter that he would have prevailed). On its face, the Trump University settlement would appear to signal caution to those with a stake in for-profits, namely colleges whose business practices have already come under scrutiny. But nearly everything about this particular fraud case was an outlier, from the brazenness of Trump University’s “playbook,” to its high-dollar class-action settlement, to the fact that it made it to court (and, thus, also the public record) in the first place.
A central tenet of one of the complaints in the class-action lawsuit, Cohen v. Trump, was that operating Trump’s seminars as “Trump University” (which went on until 2010), was a blatantly fraudulent act. That is, per the Cohen complaint, not only did the events not offer direct access to Trump’s real-estate “secrets,” but the operation conferred neither degree nor certification, making it unlike any actual university.
Although Trump himself claimed in a promotional video that the seminars’ faculty consisted of hand-selected “professors and adjunct professors” whose quality rivaled those in the Ivy League, the events instead allegedly delivered independent sales contractors, paid in commission. Additionally, the Cohen complaint alleges participants filled out detailed financial statements, ostensibly for the purpose of setting investment goals, but actually “to assess the liquid assets that each student has to spend on the next Trump University program.” While the first seminar was offered free of cost, according to the complaint, it upsold to a “Fulfillment Seminar” costing $1,495, which was followed by a $34,995 “Gold Elite” program. (Trump’s answer to the Cohen complaint either denied all allegations of wrongdoing, or claimed Trump was “without knowledge or information sufficient to form a belief as to the truth” of those allegations.)
Rather than overpromise a lucrative new career in a hot field, as some for-profit universities have been criticized of doing, Trump University was, according to the complaints, a simple get-rich-quick racket with the word “university” attached—a word that eventually disappeared in 2010, after the New York State Education Department demanded Trump remove it, as using it without any attendant properties of an institution of higher learning was illegal. The primary reason, then, that the American for-profit market doesn’t seem rattled by the Trump settlement is that Trump U was, simply put, accused of running a full-fledged scam that had little to do with universities at all, for-profit or otherwise. It’s worth noting that some for-profit schools do produce good outcomes for students, with many of the institutions offering more flexible scheduling than nonprofit and public colleges do for nontraditional students. And while the unscrupulous minority of the for-profits, such as the now-defunct Corinthian Colleges, were also accused of running scams, those alleged scams were of a markedly different nature.