Scrutinized in the midst of an ongoing $40 million lawsuit, Trump University is accused of illegally operating an unlicensed university that defrauded students. The scheme involved approximately 80,000 prospective enrollees, who attended free introductory seminars. About 9,200 of those who attended went on to pay $1,495 for three-day seminars, and nearly 800 paid up to $35,000 for extensive mentorships and workshops.
Although Trump University may be in the national spotlight, it is only the tip of a for-profit higher education iceberg that has defrauded taxpayers and ruined millions of student lives over the last several decades.
For starters, the Trump University model is virtually identical to other major for-profit colleges. While a traditional higher education institution is operated by an independent board of trustees, most for-profit colleges are subsidiaries of large Wall Street corporations. The University of Phoenix, for example, was owned by the Apollo Group, Inc. until its pending purchase by a large private equity firm last month. Likewise, among Trump Airlines, Trump Vodka, and Trump Casinos, Trump University is just one arm of Trump’s businesses, which are united by a single purpose — maximizing profits.
Looking to the industry as a whole, for-profit colleges enroll only 12 percent of all students in higher education, but students at for-profits carry 26 percent of all student loans and 47 percent of all student-loan default. Furthermore, many who have enrolled in the industry are proven to be financially and emotionally vulnerable, consisting largely of people from impoverished backgrounds. As it turns out, this is the case not by accident, but by design. Vince Martin, a former admissions advisor and recruiter at Everest University, has gone on record to say, “Our target market was people living in crisis.”
After being hook, line, and sinker’d by high pressure sales tactics, students are subject to a wide range of abuses, including low instructional quality, non-accredited programs, high withdrawal rates, significant default rates, manipulated job placement data, predatory lending, and vicious debt collection practices. This has ultimately caused an average 7 of every 10 students at the largest for-profit colleges to withdraw within 4 months of enrollment, reaching as high as 84 percent at Bridgepoint Education, Inc. Even greater numbers ultimately face financial ruin.
Although Trump University is only a single case of for-profit fraud and abuse, the national attention it has drawn presents an opportunity to expose the $40-billion industry, 88 percent of which is funded by taxpayers. Affecting over 2 million students each year, the for-profit higher education sector must be addressed.
Kevin Connell’s latest book can be purchased on Amazon.
Cover Image: Michael Vadon, “Donald Trump,” in “Conservative Political Action Conference 2015” [Album], Flickr Commons, March 2, 2015, CC BY–SA 2.0, accessed June 29, 2016, no changes made, http://bit.ly/296ndgT.