Education

How Trump University Became Such A Liability For The GOP Frontrunner

CREDIT: Lynne Sladky, AP

Republican presidential candidate Donald Trump speaks during a news conference at the Trump National Golf Club, Tuesday, March 8, 2016, in Jupiter, Fla.

Attacks on GOP frontrunner Donald Trump regarding his now-defunct Trump University have ramped up in recent weeks. With new developments in fraud cases against the company, the rest of the GOP presidential field has even more opportunities to raise the issue with voters in the hopes of taking down Donald Trump.

Rubio mentioned the Trump University lawsuit during a debate last month, saying, “There are people that borrow $36,000 to go to Trump University, and they’re suing him now … And you know what they got? They got to take a picture with a cardboard cutout of Donald Trump.”

Texas Sen. Ted Cruz responded to the lawsuit by tweeting out a fake diploma or “certificate of deception” from “Trump University.”

To understand how the business became such a liability for Trump, you have to look at how it became a legal target to begin with. Lawsuits against Trump University have been going on for anywhere from three to six years — but two fraud cases against the so-called “university” have progressed quickly in recent weeks.

Trump University was not a real school

Trump University, which began operating in 2005, was not an accredited school. Instead, it promised students advice on how to make money off of real estate — with the implication being that students may become as successful a real estate mogul as Trump himself.

The “university” said Trump handpicked its professors. In reality, the instructors were told to pretend they were chosen by Trump. As Chris Wallace pointed out to Trump in an interview on Fox News Sunday last month, one of the experts was a manager of a Buffalo Wild Wings.

Students paid hundreds for instructional CDs and DVDs and over $1,000 for seminars at Trump University. A few hundred people paid even more for the university’s mentorship and workshop packages. According to the Washington Post, 9,200 people paid $1,495 for three-day seminars.

The New York Department of Education demanded that it stop calling itself a university. The business subsequently changed its name to “Trump Entrepreneur Initiative” and closed for good shortly afterward.

The legal battles plaguing Trump University

Trump University is facing several ongoing lawsuits from both former students and the New York Attorney General’s Office. One of the cases may go to trial as soon as May, potentially disrupting Trump’s campaign amid primaries in Nebraska, West Virginia, Oregon, and Washington.

In two civil fraud cases brought by former students in California, the plaintiffs say they were deceived into maxing out their credit cards and allege the school did not offer them any practical advice. Tarla Makaeff, a critical witness in one of the civil cases, which has been going on for six years, has since asked to withdraw from the class action suit because she’s scared of the backlash. “Makaeff wants her life back without living in fear of being disparaged by Trump on national television,” her attorneys wrote in a court filing last week.

In 2013, the New York Attorney General’s Office also filed a lawsuit against the university. That case received the go-ahead from the New York Appellate Division last week. The attorney general’s lawsuit claims that Trump University “repeatedly deceived students into thinking that they were attending a legally chartered ‘university’” and misled students into believing the so-called experts on investing in real estate would be hand-picked by Trump, according to the New York Daily News.

In this May 23, 2005, file photo, real estate mogul and Reality TV star Donald Trump, left, listens as Michael Sexton introduces him at a news conference in New York where he announced the establishment of Trump University.

In this May 23, 2005, file photo, real estate mogul and Reality TV star Donald Trump, left, listens as Michael Sexton introduces him at a news conference in New York where he announced the establishment of Trump University.

Trump has made all kinds of defenses against the cases against the business, even claiming that the Hispanic judge in one of the civil fraud cases is biased against him. “I think it has to do with perhaps the fact that I’m very, very strong on the border … Now he is Hispanic, I believe. He is a very hostile judge to me,” Trump recently said on Fox News Sunday.

The real estate mogul also has claimed that the university received an “A” rating from the Better Business Bureau. But this week, the BBB released a statement refuting Trump’s claim, saying that the rating was as low as D- when complaints were coming in against Trump University in 2010. The rating rose to an “A+” in January 2015 after complaints older than three years were automatically rolled off the business review. Since September of 2015, there has been no rating at all for the business.

New details emerge about Trump University’s shady practices

Since the lawsuits against Trump University have picked up steam, more media outlets are digging into the court documents and discovering new details about how it misled students. For instance, teachers were told to pretend they knew Trump, staff were told to use buzzwords to make the school seem elite and gave the false impression that it had the trappings of a legitimate accredited university, and staff instructed low-income students to rack up credit card debt to afford the school’s seminars.

“Some consumers had showed up who were homeless and could not afford the seminars, yet I overheard Trump University representatives telling them, ‘It’s OK, just max out your credit card,'” recalled former Trump University events manager Corinne Sommer, according to court filings, the Associated Press reported.

The “university” also made scripts for teachers in which teachers were instructed to tell students they had a “close association” with Trump, according to Time’s Stephen Brill, who investigated the business’ practices last year. One of the scripts given to teachers told instructors to recall when Trump had them over for dinner before offering advice. An instructor admitted he had never had dinner with Trump during a 2013 deposition, Brill’s investigation found.

Trump University scripts also allegedly asked prospective students how much of their 401(k) was lost in the stock market and encouraged students to empty their 401(k)s to receive a higher return once they followed the instructor’s advice. Some of Trump University’s tactics may be subject to accusations of “financial elder abuse” statutes in Florida and California statutes, Forbes reported.

Trump University is just one part of a much bigger problem

Trump’s involvement in a for-profit “university” is particularly relevant at a time when the federal government is focusing more on regulating and monitoring for-profit colleges — compared to a five or six years ago, when for-profit colleges could operate with little intervention.

Unlike Trump University, for-profit colleges are generally regionally accredited, and thus have some legitimacy as a “real” college. But many of them engage in manipulative, high-pressure recruitment tactics, like guilting low-income parents about their ability to provide for their child to motivate them to sign up immediately, or calling prospective students many times after open-house visits.

Students wait outside Everest College, Tuesday, April, 28, 2015 in Industry, Calif., hoping to get their transcriptions and information on loan forgiveness and transferring credits to other schools.

Students wait outside Everest College, Tuesday, April, 28, 2015 in Industry, Calif., hoping to get their transcriptions and information on loan forgiveness and transferring credits to other schools. (AP Photo/Christine Armario)

CREDIT: Christine Armario, AP

And as with Trump University, some for-profit colleges have been accused of promising better results than they know they can deliver, sometimes through exaggerating how many connections they have within a given industry. For-profit colleges have also been criticized for providing false job placement rates, as was the case with Corinthian Colleges, which shut down the rest of its campuses last year after being fined $30 million from the U.S. Department of Education. Most recently, a lawsuit against the University of Phoenix claims the company misrepresented its compliance with federal financial aid regulations, PoliticoPro reported.

Although Trump actually ran a for-profit “university,” other GOP candidates — including many who have since dropped out of the race — have also supported or been involved with for-profit colleges.

Former Florida Gov. Jeb Bush, for instance, was the keynote speaker at a Las Vegas annual convention of the trade association for for-profit colleges in June of 2014. And former Louisiana Gov. Bobby Jindal opposed the president’s “gainful employment” rule, which ensures for-profit colleges prove they can prepare students for the job market or else lose their federal student aid. Florida Sen. Marco Rubio, who has accused Trump of running a “fake school,” doesn’t have clean hands either — he wrote a letter asking the U.S. Department of Education for “leniency’ in its investigation of Corinthian Colleges and received thousands of dollars from the for-profit college chain.