Trump University taught only one thing: A $25 million lesson for Donald Trump

You’re fired.
You’re fired.
Image: Reuters/Jonathan Ernst
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Donald Trump insists that he “never” settles lawsuits, but here we go again. The US president-elect just agreed to settle the multiple cases against his former for-profit university for $25 million. He will also pay up to $1 million in penalties to the state of New York.

Taking up the most recent spot on the long list of Trump’s legal tumults, the suits against Trump University—in which former students alleged that the school failed to deliver on its promises of a quality real-estate education—aren’t particularly noticeable for their price tag, but rather their timing.

The class-action suits were originally slated to go to court in the period between Election Day and Trump’s inauguration, so in all probability, it was the awkward idea of swearing in a president in the midst of a trial for fraud that pressed Trump’s legal team into agreeing to a settlement in the first place.

“Donald Trump fought us every step of the way, filing baseless charges and fruitless appeals and refusing to settle for even modest amounts of compensation for the victims of his phony university,” New York state attorney general Eric Schneiderman said.

While $25 million may not be a big loss for Trump personally, the settlement is yet another blow to the idea of for-profit colleges, which have staggered under the weight of multiple lawsuits and federal investigations over the past few years. Corinthian Colleges, a chain of 107 campuses across the US, went bankrupt in 2015 after being ordered to pay $530 million for trapping students into predatory private loans, and the similar group Education Management Corporation was ordered late last year to pay close to $100 million for enrolling students through illegal means.

Add an education company formerly owned by America’s next president to that list. Called a “fraudulent scheme” that “preyed upon the elderly and uneducated” by some of its own employees, Trump University marketed itself as a jump-starter for lucrative careers. In reality, former students alleged in the lawsuits, the for-profit school swindled pupils of thousands of dollars while offering “no practical advice.” Over 6,000 students in the US could have been affected, and the high-profile nature of the suits—especially now—is another dent to the credibility of for-profit schools.

Part of the problem lies in the nature of for-profit education itself—a business model that, while enthusiastically endorsed by Trump, troubles many academics and education experts. “There’s an inherent conflict,” Winthrop University history professor A.J. Angulo, the author of a book on fraud within for-profit education, told Quartz earlier this year. “The profit motive has ultimately made it very difficult for for-profit institutions to live up to academic and professional standards.”

Fret not for the end of a Trump-branded school. There are still plenty of other things with the president-elect’s name on them.

Correction (Nov. 19): A previous version of this article misidentified the for-profit college company Education Management Corporation as Apollo Education Group.