Donald Trump reversed course and agreed Friday to pay $25 million to settle a series of lawsuits stemming from his defunct for-profit education venture, Trump University, finally putting to rest fraud allegations by former students, which have dogged him for years and hampered his presidential campaign.
The settlement was announced by the New York attorney general, just 10 days before one of the cases, a federal class-action lawsuit in San Diego, was set to be heard by a jury. The deal averts a potentially embarrassing and highly unusual predicament: a president-elect on trial, and possibly even taking the stand in his own defense, while scrambling to build his incoming administration.
It was a remarkable concession from a real estate mogul who derides legal settlements and has mocked fellow businessmen who agree to them.
But the allegations in the case were highly unpleasant for Trump: Students paid up to $35,000 in tuition for programs that, according to the testimony of former Trump University employees, used high-pressure sales tactics and employed unqualified instructors.
The agreement wraps together the outstanding Trump University litigation, including two federal class-action cases in San Diego, and a separate lawsuit by Eric T. Schneiderman, the New York attorney general. The complaints alleged that students were cheated out of thousands of dollars in tuition through deceptive claims about what they would learn and high-pressure sales tactics.
“I am pleased that under the terms of this settlement, every victim will receive restitution and that Donald Trump will pay up to $1 million in penalties to the state of New York for violating state education laws,” Schneiderman said in a statement. “The victims of Trump University have waited years for today’s result, and I am pleased that their patience — and persistence — will be rewarded by this $25 million settlement.”
The settlement marks a significant reversal from Trump, who had steadfastly rejected the allegations and vowed to fight the lawsuits, asserting students filled out evaluations showing they were mostly happy with what they had learned in seminars. When political opponents pressed him on the claims during the campaign, Trump doubled down, saying he would eventually reopen Trump University.
“It’s something I could have settled many times,” Trump said during a February debate. “I could settle it right now for very little money, but I don’t want to do it out of principle.”
He added: “The people that took the course all signed — most — many — many signed report cards saying it was fantastic, it was wonderful, it was beautiful.”
But the position of Trump and his legal team appeared to soften soon after his election on Nov. 8. At a hearing last week, Daniel Petrocelli, a lawyer for Trump, expressed interest in moving toward a settlement. Meanwhile, Trump’s lawyers were seeking to delay the trial in one of the California cases until after his inauguration on Jan. 20, while also requesting that he be allowed to testify on video.
At a hearing on the case in San Diego on Friday, Petrocelli said Trump settled the case “without an acknowledgment of fault or liability.”
Under the agreement, Trump will pay $21 million to settle the two California class-action suits and $4 million to settle with the New York attorney general. The lawyers for the plaintiffs waived their attorneys’ fees.
In addition to the financial rewards, the conclusion of the Trump University cases brings vindication to former students, mostly ordinary people across the country who felt they had been robbed of their savings by Trump, a successful businessman they respected and admired.
One student, Jeffrey Tufenkian, who enrolled with his wife to pursue a real estate career, told The New York Times in 2011 that the experience “was almost completely worthless.”