Donald Trump promised a shortcut to wealth, with a free seminar and his famous name. What followed was upselling, fake “professors”, and a 98% rating that hid angry students.
In this episode, we tell the story of Trump University and the $25 million settlement.
[00:00:05] Hello, hello, hello, and welcome to English Learning for Curious Minds, by Leonardo English, the show where you can listen to fascinating stories and learn weird and wonderful things about the world at the same time as improving your English.
[00:00:21] I'm Alastair Budge, and today it’s part three of our three-part series on the theme of “university”.
[00:00:30] In case you missed them, in part one we talked about the history of universities in general.
[00:00:37] In part two, we talked about how university works in the UK.
[00:00:42] And today, we’re saving the best for last, or worst for last, you could argue.
[00:00:48] It’s the story of Trump University, a university that has been called “a total fraud”, “an absolute scam”, and not a university at all.
[00:00:59] So, let’s not waste a minute and get right into it.
[00:01:05] You might know the expression “there’s no such thing as a free lunch”.
[00:01:11] It means that nothing in life is free, and is thought to come from the American practice of bars offering a “free lunch”, but only if you buy a drink.
[00:01:24] It’s a classic sales tactic: offer something for free, but really it comes with a catch, a hidden opportunity to sell you something else.
[00:01:35] It’s something we all know about, whether that’s downloading a “free ebook”, registering for a “free webinar” or joining a “free training”. It’s almost never really free.
[00:01:48] But sometimes it sounds so appealing, and you never know, this one might be different.
[00:01:57] In the late 2000s, all over the United States, people started seeing adverts for something that sounded almost too good to be true.
[00:02:08] Donald Trump, then two seasons into The Apprentice and the self-declared “without question, the world’s most famous businessman”, the billionaire real-estate developer, was promising to spill the beans, to share his secrets of success.
[00:02:28] He was launching Trump University, a university in which students would learn how to make it big not just in the world of real estate, but in the world of business. It was a ticket to wealth and success.
[00:02:47] And the best bit?
[00:02:49] There was a free 90-minute seminar you could attend. Free. Zero dollars. You just needed to register and come along for 90 minutes.
[00:03:00] Thousands of excited potential students attended, piling into hotel conference rooms to learn from the master.
[00:03:09] As they entered the conference, they could see they were in the right place. The Trump name was all over the place, as well as pictures of The Donald, complete with the trademark “I mean business” look, coiffured blonde hair, red tie and expensive suit.
[00:03:27] Yes, this was a seminar for Trump University, all right.
[00:03:33] The real Donald Trump was nowhere to be seen, but that was ok. It was a seminar led by his hand-picked experts; he was not just a successful businessman, he was the world’s most famous businessman, he couldn’t come to all of these events.
[00:03:51] The lights dimmed, and the seminar started.
[00:03:56] It was 90 minutes of…well, not a lot.
[00:04:01] There was a promotional video in which Donald Trump boasted about how this university was going to be better than the best business schools in the country, and he knew because he had been to the best business school in the country. It was going to take less time and cost less. It would be better, quicker, and cheaper, the holy triumvirate.
[00:04:26] The 90-minute seminar itself didn’t teach you very much, and the person giving the presentation didn’t seem to be particularly knowledgeable about the world of real estate.
[00:04:39] What was clear, however, was what they wanted you to do next.
[00:04:44] To take the next step on your journey to wealth and success, there was a three-day seminar.
[00:04:52] This wasn’t free; it was $1,495, but it wasn’t a cost. It was an investment in your future.
[00:05:03] If you weren’t prepared to invest in yourself and if you weren’t prepared to learn from Donald Trump and his hand-picked professors, well, as Trump himself put it in the promotional video, “you’re just not going to make it in terms of the world of success”.
[00:05:21] It sounded, well, convincing enough for thousands of people to take action.
[00:05:28] For a mere $1,495, they could take this first step, which was this three-day seminar.
[00:05:37] And in fact, as a special bonus, this three-day seminar included a “free” ticket for a friend, so really, if you were splitting the cost, it was only $750. A veritable bargain.
[00:05:52] But when the day came, and they yet again arrived at the designated hotel conference room, what they found was more of the same.
[00:06:02] Not much real estate training at all, no Donald Trump, and a lot of promotional and marketing material talking about how wonderful their life would be after taking the next step at Trump University.
[00:06:18] This three-day seminar wasn’t, after all, the final step.
[00:06:23] During those three days, they were told about the next stages.
[00:06:28] There was a series of “elite” packages that attendees could choose from: Bronze, Silver, and Gold.
[00:06:36] Bronze was only $9,995, Silver was $19,495, and Gold was $34,995.
[00:06:52] You didn’t get all that much with Bronze, but if you were prepared to shell out the full $35,000 for the Gold package, you got access to a bunch of retreats and seminars, as well as one year of mentorship from one of Trump’s hand-picked real estate professionals and access to Trump’s private deals.
[00:07:18] In fact, the entire three-day seminar, which, let’s not forget, people had paid $1,500 for the pleasure of attending, was essentially a sales pitch for these higher-priced elite packages.
[00:07:34] Over the 72-hour period, representatives from the university mingled among attendees, flattering them for taking the initiative, and congratulating them on what was no doubt going to be a lucrative and long career in real estate, if they chose the appropriate elite package, that was.
[00:07:56] After all, the cost of a package was minimal, considering the value you’d get out of it, and the money you’d make.
[00:08:04] It wasn’t a cost; it was an investment, an investment that your future self would thank you for.
[00:08:13] And thousands of people did take the next step, paying up to $35,000 for the most expensive “Gold” package.
[00:08:24] And what did they get? Well, even for those who had shelled out tens of thousands of dollars, many would later report that they didn’t receive what they had been promised.
[00:08:38] The retreats and seminars seemed to be further opportunities to be upsold, pressurised to buy additional packages and products. The mentorship was non-existent, and the real estate data they were given was public information.
[00:08:58] It was, to quote Marco Rubio, the former Trump critic, but now fierce ally and Secretary of State, “a complete sham”.
[00:09:08] There was nothing there.
[00:09:11] Now, selling a “get-rich-quick scheme” might be immoral and shady, but it isn’t illegal per se.
[00:09:21] The business model of Trump University, of the free seminar, upselling to one product before upselling again to a more expensive one, is still one that's in use today.
[00:09:34] Immoral it certainly may be but illegal it is not.
[00:09:39] The problem with Trump University was that it made several, perhaps unnecessary, errors.
[00:09:47] The first was with language.
[00:09:50] In the United States, like in many countries, it is the government that decides what can call itself a university. The word means something, and for an educational institution to call itself a university, it needs authorisation.
[00:10:09] Trump University didn’t have this.
[00:10:13] The second problem was also related to language, and it was that he promised there would be “professors and adjunct professors”. If something isn’t a real university, it can’t claim it has professors. I cannot suddenly declare someone to be a professor at Leonardo English University, and nor could Donald Trump declare one of his staff members to be a “professor at Trump University”.
[00:10:42] And the third problem was to do with these “professors”.
[00:10:47] In the promotional video, Trump boasted that these “best of the best” professors were all people who were hand-picked by him, which of course was a big selling point. Trump was the main attraction; he was the definition of success, and if he had personally chosen all the instructors, well, that was immensely valuable.
[00:11:14] The problem, it would later transpire, was that he hadn’t hand-picked anyone. When he was presented with a list of names of people who had “taught” at the university, giving seminars to people who had paid tens of thousands of dollars, in many cases, he didn’t know who they were.
[00:11:34] This all came to light in 2013, after the State of New York filed a civil lawsuit against Trump University for “illegal business practices”, essentially misrepresenting what customers were buying.
[00:11:51] Trump countered, with lawyers showing documents that the university had a 98% student satisfaction rate, and even building a website, 98percentapproval.com.
[00:12:05] As part of the court process, Trump University had to hand over a bunch of documents to support its claims and counter the allegation of illegal business practices.
[00:12:20] And what came out in the process was…enlightening.
[00:12:25] In terms of the 98% approval claim, prosecutors did admit that the number looked correct, but on closer inspection, something seemed fishy. Students who had given the course four or five stars, on a five-point scale, often left negative feedback, criticising the course, the instructors, and the high-pressured sales environment around it. It seemed strange for someone who was clearly unhappy with a product to give it such a high rating.
[00:13:01] What’s more, they looked at the refund rate on the programme, and found that 32% of people who went to the three-day seminar and 16% of people who bought the gold package requested a refund.
[00:13:18] Something didn’t seem to add up. If 32% of people request a refund, how can 98% of people say it was fantastic?
[00:13:29] It was almost as if they were only asking selected students to leave their feedback, pushing people hard to leave five-star reviews, or just fudging the numbers altogether.
[00:13:43] And in the document discovery process, Trump University was forced to hand over its internal documents. What emerged was that it was really much more of a sales organisation than an educational institution.
[00:14:01] The “staff” at the seminars were essentially sales-representatives, and they were tasked with pushing as many people as possible towards the expensive, “elite” packages.
[00:14:15] The 172-page internal handbook detailed some of the tactics they used and they were illuminating.
[00:14:25] One section was dedicated to handling objections, which are of course an important part of any sales job.
[00:14:33] But at Trump University, things were taken to their extreme.
[00:14:40] For someone who said that $35,000 was a lot of money, they were encouraged not to think about the $35,000 number, but rather only on the interest payments on their credit card, and of course they were all recommended to take out credit to pay for the course.
[00:14:58] For someone who asked about success guarantees, they were told to tell the prospect that they would be given all the tools and information for success, but the only thing stopping them was themselves.
[00:15:12] And for someone who suggested they were considering Trump University as well as other real estate investing schemes, they were reminded of Donald Trump’s personal success and wealth, and told–and I’m quoting directly–”Don't buy a Kia when you can have a Bentley.”
[00:15:31] But all of this would eventually catch up with Trump University.
[00:15:37] The legal problems started in 2013, with the Attorney General of New York filing a lawsuit against the institution, accusing Trump University of “persistent fraudulent, illegal and deceptive conduct.”
[00:15:53] And it wasn’t just New York.
[00:15:56] Two separate class-action lawsuits were filed in California, representing thousands of former students who claimed they had been misled and left tens of thousands of dollars out of pocket.
[00:16:10] The allegations were simple, but damning:
[00:16:14] Trump University wasn’t a real university.
[00:16:17] Its so-called professors weren’t professors at all.
[00:16:21] And the promises of mentorship, exclusive property listings, and insider access were simply false.
[00:16:30] As you might imagine, Donald Trump consistently denied any wrongdoing. He kept coming back to that alleged 98% approval rating, and when he decided to run for president, he continued this defence, even insisting that he would never settle the case.
[00:16:50] And yet, just days after being elected President of the United States, he did exactly that. He agreed to settle all three cases for $25 million, all without admitting guilt.
[00:17:06] For the thousands of former students, the settlement meant they would finally get some of their money back.
[00:17:14] For Trump, it meant the lawsuits would not hang over his presidency. And, for better or for worse, it worked, or at least it has been so outdone by everything else that has happened since then that it’s nowhere near the top of a list of scandals involving Donald Trump.
[00:17:33] Now, to wrap things up, the story of Trump University is, on one level, simply another “get rich quick” scheme, a classic upsell funnel dressed up with glossy marketing.
[00:17:47] Plenty of companies have used similar tactics, plenty of people have fallen for them, and plenty of people still do fall for them.
[00:17:57] But what made it a little different was the name.
[00:18:02] Donald Trump’s entire pitch was based on the power of his brand: “I am the most successful businessman in the world, and if you learn from me, you too can be successful.”
[00:18:15] That promise, that proximity to Trump meant proximity to wealth, was what persuaded thousands of ordinary Americans to part with their savings, to take out loans, in some cases loans that they are still paying off to this very day.
[00:18:32] Compared to a “real” university, there is a stark irony here, and an even greater one if we go back to the very first days of universities.
[00:18:44] To bring it back to the very start, as you may remember, the University of Bologna made no promises to its students, and the courses in grammar, rhetoric and logic were perhaps as far as you could get from vocational, practical business advice.
[00:19:03] Yet in reality, they prepared these young scholars perfectly for the careers they would go on to have in the church, in law, or in government.
[00:19:15] With Trump University, the entire premise was about giving people the skills they needed not just for professional success, but for vast wealth.
[00:19:26] And yet, for most of the people who attended, it taught nothing of the sort.
[00:19:32] According to a former sales manager at Trump University, “To my knowledge, not a single consumer who paid for a Trump University seminar program went on to successfully invest in real estate based on the techniques that were taught”
[00:19:49] In the end, Trump University lasted barely seven years.
[00:19:54] It collected an estimated $40 million in fees, returned $25 million in settlements, and the company was officially dissolved in 2017.
[00:20:06] Compare that to the University of Bologna, which has lasted almost 1,000 years, or almost any other of the tens of thousands of “official” universities worldwide that are still educating millions of students every year.
[00:20:21] It’s a reminder that words matter, and so does substance.
[00:20:26] You can call something a university, you can plaster it with the pictures of a famous businessman, you can fill a glossy brochure with promises, but if there’s nothing behind it, it won’t last a very long time.
[00:20:40] Perhaps what students of Trump University should have studied was the sales tactics of the organisation itself. It was clearly very efficient at separating vulnerable people from their hard-earned money, and had even made a 172-page handbook on how to do it.
[00:21:01] Unfortunately, that was a lesson that Trump University “graduates” would have to learn the hard way.
[00:21:09] OK, then, that is it for today's episode on Trump University, and with that comes the end of this three-part mini-series on the theme of “university”.
[00:21:18] I hope it's been an interesting one and that you've learnt something new.
[00:21:22] As always, I would love to know what you thought of this episode and from this mini-series in general. Have you ever fallen for a “get-rich-quick” scheme, or are there similar things in your country? What was your experience of university like and how could it have been better? I would love to know, so let’s get this discussion started.
[00:21:42] You can head right into our community forum, which is at community.leonardoenglish.com and get chatting away to other curious minds.
[00:21:51] You've been listening to English Learning for Curious Minds by Leonardo English.
[00:21:56] I'm Alastair Budge, you stay safe, and I'll catch you in the next episode.
[00:00:05] Hello, hello, hello, and welcome to English Learning for Curious Minds, by Leonardo English, the show where you can listen to fascinating stories and learn weird and wonderful things about the world at the same time as improving your English.
[00:00:21] I'm Alastair Budge, and today it’s part three of our three-part series on the theme of “university”.
[00:00:30] In case you missed them, in part one we talked about the history of universities in general.
[00:00:37] In part two, we talked about how university works in the UK.
[00:00:42] And today, we’re saving the best for last, or worst for last, you could argue.
[00:00:48] It’s the story of Trump University, a university that has been called “a total fraud”, “an absolute scam”, and not a university at all.
[00:00:59] So, let’s not waste a minute and get right into it.
[00:01:05] You might know the expression “there’s no such thing as a free lunch”.
[00:01:11] It means that nothing in life is free, and is thought to come from the American practice of bars offering a “free lunch”, but only if you buy a drink.
[00:01:24] It’s a classic sales tactic: offer something for free, but really it comes with a catch, a hidden opportunity to sell you something else.
[00:01:35] It’s something we all know about, whether that’s downloading a “free ebook”, registering for a “free webinar” or joining a “free training”. It’s almost never really free.
[00:01:48] But sometimes it sounds so appealing, and you never know, this one might be different.
[00:01:57] In the late 2000s, all over the United States, people started seeing adverts for something that sounded almost too good to be true.
[00:02:08] Donald Trump, then two seasons into The Apprentice and the self-declared “without question, the world’s most famous businessman”, the billionaire real-estate developer, was promising to spill the beans, to share his secrets of success.
[00:02:28] He was launching Trump University, a university in which students would learn how to make it big not just in the world of real estate, but in the world of business. It was a ticket to wealth and success.
[00:02:47] And the best bit?
[00:02:49] There was a free 90-minute seminar you could attend. Free. Zero dollars. You just needed to register and come along for 90 minutes.
[00:03:00] Thousands of excited potential students attended, piling into hotel conference rooms to learn from the master.
[00:03:09] As they entered the conference, they could see they were in the right place. The Trump name was all over the place, as well as pictures of The Donald, complete with the trademark “I mean business” look, coiffured blonde hair, red tie and expensive suit.
[00:03:27] Yes, this was a seminar for Trump University, all right.
[00:03:33] The real Donald Trump was nowhere to be seen, but that was ok. It was a seminar led by his hand-picked experts; he was not just a successful businessman, he was the world’s most famous businessman, he couldn’t come to all of these events.
[00:03:51] The lights dimmed, and the seminar started.
[00:03:56] It was 90 minutes of…well, not a lot.
[00:04:01] There was a promotional video in which Donald Trump boasted about how this university was going to be better than the best business schools in the country, and he knew because he had been to the best business school in the country. It was going to take less time and cost less. It would be better, quicker, and cheaper, the holy triumvirate.
[00:04:26] The 90-minute seminar itself didn’t teach you very much, and the person giving the presentation didn’t seem to be particularly knowledgeable about the world of real estate.
[00:04:39] What was clear, however, was what they wanted you to do next.
[00:04:44] To take the next step on your journey to wealth and success, there was a three-day seminar.
[00:04:52] This wasn’t free; it was $1,495, but it wasn’t a cost. It was an investment in your future.
[00:05:03] If you weren’t prepared to invest in yourself and if you weren’t prepared to learn from Donald Trump and his hand-picked professors, well, as Trump himself put it in the promotional video, “you’re just not going to make it in terms of the world of success”.
[00:05:21] It sounded, well, convincing enough for thousands of people to take action.
[00:05:28] For a mere $1,495, they could take this first step, which was this three-day seminar.
[00:05:37] And in fact, as a special bonus, this three-day seminar included a “free” ticket for a friend, so really, if you were splitting the cost, it was only $750. A veritable bargain.
[00:05:52] But when the day came, and they yet again arrived at the designated hotel conference room, what they found was more of the same.
[00:06:02] Not much real estate training at all, no Donald Trump, and a lot of promotional and marketing material talking about how wonderful their life would be after taking the next step at Trump University.
[00:06:18] This three-day seminar wasn’t, after all, the final step.
[00:06:23] During those three days, they were told about the next stages.
[00:06:28] There was a series of “elite” packages that attendees could choose from: Bronze, Silver, and Gold.
[00:06:36] Bronze was only $9,995, Silver was $19,495, and Gold was $34,995.
[00:06:52] You didn’t get all that much with Bronze, but if you were prepared to shell out the full $35,000 for the Gold package, you got access to a bunch of retreats and seminars, as well as one year of mentorship from one of Trump’s hand-picked real estate professionals and access to Trump’s private deals.
[00:07:18] In fact, the entire three-day seminar, which, let’s not forget, people had paid $1,500 for the pleasure of attending, was essentially a sales pitch for these higher-priced elite packages.
[00:07:34] Over the 72-hour period, representatives from the university mingled among attendees, flattering them for taking the initiative, and congratulating them on what was no doubt going to be a lucrative and long career in real estate, if they chose the appropriate elite package, that was.
[00:07:56] After all, the cost of a package was minimal, considering the value you’d get out of it, and the money you’d make.
[00:08:04] It wasn’t a cost; it was an investment, an investment that your future self would thank you for.
[00:08:13] And thousands of people did take the next step, paying up to $35,000 for the most expensive “Gold” package.
[00:08:24] And what did they get? Well, even for those who had shelled out tens of thousands of dollars, many would later report that they didn’t receive what they had been promised.
[00:08:38] The retreats and seminars seemed to be further opportunities to be upsold, pressurised to buy additional packages and products. The mentorship was non-existent, and the real estate data they were given was public information.
[00:08:58] It was, to quote Marco Rubio, the former Trump critic, but now fierce ally and Secretary of State, “a complete sham”.
[00:09:08] There was nothing there.
[00:09:11] Now, selling a “get-rich-quick scheme” might be immoral and shady, but it isn’t illegal per se.
[00:09:21] The business model of Trump University, of the free seminar, upselling to one product before upselling again to a more expensive one, is still one that's in use today.
[00:09:34] Immoral it certainly may be but illegal it is not.
[00:09:39] The problem with Trump University was that it made several, perhaps unnecessary, errors.
[00:09:47] The first was with language.
[00:09:50] In the United States, like in many countries, it is the government that decides what can call itself a university. The word means something, and for an educational institution to call itself a university, it needs authorisation.
[00:10:09] Trump University didn’t have this.
[00:10:13] The second problem was also related to language, and it was that he promised there would be “professors and adjunct professors”. If something isn’t a real university, it can’t claim it has professors. I cannot suddenly declare someone to be a professor at Leonardo English University, and nor could Donald Trump declare one of his staff members to be a “professor at Trump University”.
[00:10:42] And the third problem was to do with these “professors”.
[00:10:47] In the promotional video, Trump boasted that these “best of the best” professors were all people who were hand-picked by him, which of course was a big selling point. Trump was the main attraction; he was the definition of success, and if he had personally chosen all the instructors, well, that was immensely valuable.
[00:11:14] The problem, it would later transpire, was that he hadn’t hand-picked anyone. When he was presented with a list of names of people who had “taught” at the university, giving seminars to people who had paid tens of thousands of dollars, in many cases, he didn’t know who they were.
[00:11:34] This all came to light in 2013, after the State of New York filed a civil lawsuit against Trump University for “illegal business practices”, essentially misrepresenting what customers were buying.
[00:11:51] Trump countered, with lawyers showing documents that the university had a 98% student satisfaction rate, and even building a website, 98percentapproval.com.
[00:12:05] As part of the court process, Trump University had to hand over a bunch of documents to support its claims and counter the allegation of illegal business practices.
[00:12:20] And what came out in the process was…enlightening.
[00:12:25] In terms of the 98% approval claim, prosecutors did admit that the number looked correct, but on closer inspection, something seemed fishy. Students who had given the course four or five stars, on a five-point scale, often left negative feedback, criticising the course, the instructors, and the high-pressured sales environment around it. It seemed strange for someone who was clearly unhappy with a product to give it such a high rating.
[00:13:01] What’s more, they looked at the refund rate on the programme, and found that 32% of people who went to the three-day seminar and 16% of people who bought the gold package requested a refund.
[00:13:18] Something didn’t seem to add up. If 32% of people request a refund, how can 98% of people say it was fantastic?
[00:13:29] It was almost as if they were only asking selected students to leave their feedback, pushing people hard to leave five-star reviews, or just fudging the numbers altogether.
[00:13:43] And in the document discovery process, Trump University was forced to hand over its internal documents. What emerged was that it was really much more of a sales organisation than an educational institution.
[00:14:01] The “staff” at the seminars were essentially sales-representatives, and they were tasked with pushing as many people as possible towards the expensive, “elite” packages.
[00:14:15] The 172-page internal handbook detailed some of the tactics they used and they were illuminating.
[00:14:25] One section was dedicated to handling objections, which are of course an important part of any sales job.
[00:14:33] But at Trump University, things were taken to their extreme.
[00:14:40] For someone who said that $35,000 was a lot of money, they were encouraged not to think about the $35,000 number, but rather only on the interest payments on their credit card, and of course they were all recommended to take out credit to pay for the course.
[00:14:58] For someone who asked about success guarantees, they were told to tell the prospect that they would be given all the tools and information for success, but the only thing stopping them was themselves.
[00:15:12] And for someone who suggested they were considering Trump University as well as other real estate investing schemes, they were reminded of Donald Trump’s personal success and wealth, and told–and I’m quoting directly–”Don't buy a Kia when you can have a Bentley.”
[00:15:31] But all of this would eventually catch up with Trump University.
[00:15:37] The legal problems started in 2013, with the Attorney General of New York filing a lawsuit against the institution, accusing Trump University of “persistent fraudulent, illegal and deceptive conduct.”
[00:15:53] And it wasn’t just New York.
[00:15:56] Two separate class-action lawsuits were filed in California, representing thousands of former students who claimed they had been misled and left tens of thousands of dollars out of pocket.
[00:16:10] The allegations were simple, but damning:
[00:16:14] Trump University wasn’t a real university.
[00:16:17] Its so-called professors weren’t professors at all.
[00:16:21] And the promises of mentorship, exclusive property listings, and insider access were simply false.
[00:16:30] As you might imagine, Donald Trump consistently denied any wrongdoing. He kept coming back to that alleged 98% approval rating, and when he decided to run for president, he continued this defence, even insisting that he would never settle the case.
[00:16:50] And yet, just days after being elected President of the United States, he did exactly that. He agreed to settle all three cases for $25 million, all without admitting guilt.
[00:17:06] For the thousands of former students, the settlement meant they would finally get some of their money back.
[00:17:14] For Trump, it meant the lawsuits would not hang over his presidency. And, for better or for worse, it worked, or at least it has been so outdone by everything else that has happened since then that it’s nowhere near the top of a list of scandals involving Donald Trump.
[00:17:33] Now, to wrap things up, the story of Trump University is, on one level, simply another “get rich quick” scheme, a classic upsell funnel dressed up with glossy marketing.
[00:17:47] Plenty of companies have used similar tactics, plenty of people have fallen for them, and plenty of people still do fall for them.
[00:17:57] But what made it a little different was the name.
[00:18:02] Donald Trump’s entire pitch was based on the power of his brand: “I am the most successful businessman in the world, and if you learn from me, you too can be successful.”
[00:18:15] That promise, that proximity to Trump meant proximity to wealth, was what persuaded thousands of ordinary Americans to part with their savings, to take out loans, in some cases loans that they are still paying off to this very day.
[00:18:32] Compared to a “real” university, there is a stark irony here, and an even greater one if we go back to the very first days of universities.
[00:18:44] To bring it back to the very start, as you may remember, the University of Bologna made no promises to its students, and the courses in grammar, rhetoric and logic were perhaps as far as you could get from vocational, practical business advice.
[00:19:03] Yet in reality, they prepared these young scholars perfectly for the careers they would go on to have in the church, in law, or in government.
[00:19:15] With Trump University, the entire premise was about giving people the skills they needed not just for professional success, but for vast wealth.
[00:19:26] And yet, for most of the people who attended, it taught nothing of the sort.
[00:19:32] According to a former sales manager at Trump University, “To my knowledge, not a single consumer who paid for a Trump University seminar program went on to successfully invest in real estate based on the techniques that were taught”
[00:19:49] In the end, Trump University lasted barely seven years.
[00:19:54] It collected an estimated $40 million in fees, returned $25 million in settlements, and the company was officially dissolved in 2017.
[00:20:06] Compare that to the University of Bologna, which has lasted almost 1,000 years, or almost any other of the tens of thousands of “official” universities worldwide that are still educating millions of students every year.
[00:20:21] It’s a reminder that words matter, and so does substance.
[00:20:26] You can call something a university, you can plaster it with the pictures of a famous businessman, you can fill a glossy brochure with promises, but if there’s nothing behind it, it won’t last a very long time.
[00:20:40] Perhaps what students of Trump University should have studied was the sales tactics of the organisation itself. It was clearly very efficient at separating vulnerable people from their hard-earned money, and had even made a 172-page handbook on how to do it.
[00:21:01] Unfortunately, that was a lesson that Trump University “graduates” would have to learn the hard way.
[00:21:09] OK, then, that is it for today's episode on Trump University, and with that comes the end of this three-part mini-series on the theme of “university”.
[00:21:18] I hope it's been an interesting one and that you've learnt something new.
[00:21:22] As always, I would love to know what you thought of this episode and from this mini-series in general. Have you ever fallen for a “get-rich-quick” scheme, or are there similar things in your country? What was your experience of university like and how could it have been better? I would love to know, so let’s get this discussion started.
[00:21:42] You can head right into our community forum, which is at community.leonardoenglish.com and get chatting away to other curious minds.
[00:21:51] You've been listening to English Learning for Curious Minds by Leonardo English.
[00:21:56] I'm Alastair Budge, you stay safe, and I'll catch you in the next episode.
[00:00:05] Hello, hello, hello, and welcome to English Learning for Curious Minds, by Leonardo English, the show where you can listen to fascinating stories and learn weird and wonderful things about the world at the same time as improving your English.
[00:00:21] I'm Alastair Budge, and today it’s part three of our three-part series on the theme of “university”.
[00:00:30] In case you missed them, in part one we talked about the history of universities in general.
[00:00:37] In part two, we talked about how university works in the UK.
[00:00:42] And today, we’re saving the best for last, or worst for last, you could argue.
[00:00:48] It’s the story of Trump University, a university that has been called “a total fraud”, “an absolute scam”, and not a university at all.
[00:00:59] So, let’s not waste a minute and get right into it.
[00:01:05] You might know the expression “there’s no such thing as a free lunch”.
[00:01:11] It means that nothing in life is free, and is thought to come from the American practice of bars offering a “free lunch”, but only if you buy a drink.
[00:01:24] It’s a classic sales tactic: offer something for free, but really it comes with a catch, a hidden opportunity to sell you something else.
[00:01:35] It’s something we all know about, whether that’s downloading a “free ebook”, registering for a “free webinar” or joining a “free training”. It’s almost never really free.
[00:01:48] But sometimes it sounds so appealing, and you never know, this one might be different.
[00:01:57] In the late 2000s, all over the United States, people started seeing adverts for something that sounded almost too good to be true.
[00:02:08] Donald Trump, then two seasons into The Apprentice and the self-declared “without question, the world’s most famous businessman”, the billionaire real-estate developer, was promising to spill the beans, to share his secrets of success.
[00:02:28] He was launching Trump University, a university in which students would learn how to make it big not just in the world of real estate, but in the world of business. It was a ticket to wealth and success.
[00:02:47] And the best bit?
[00:02:49] There was a free 90-minute seminar you could attend. Free. Zero dollars. You just needed to register and come along for 90 minutes.
[00:03:00] Thousands of excited potential students attended, piling into hotel conference rooms to learn from the master.
[00:03:09] As they entered the conference, they could see they were in the right place. The Trump name was all over the place, as well as pictures of The Donald, complete with the trademark “I mean business” look, coiffured blonde hair, red tie and expensive suit.
[00:03:27] Yes, this was a seminar for Trump University, all right.
[00:03:33] The real Donald Trump was nowhere to be seen, but that was ok. It was a seminar led by his hand-picked experts; he was not just a successful businessman, he was the world’s most famous businessman, he couldn’t come to all of these events.
[00:03:51] The lights dimmed, and the seminar started.
[00:03:56] It was 90 minutes of…well, not a lot.
[00:04:01] There was a promotional video in which Donald Trump boasted about how this university was going to be better than the best business schools in the country, and he knew because he had been to the best business school in the country. It was going to take less time and cost less. It would be better, quicker, and cheaper, the holy triumvirate.
[00:04:26] The 90-minute seminar itself didn’t teach you very much, and the person giving the presentation didn’t seem to be particularly knowledgeable about the world of real estate.
[00:04:39] What was clear, however, was what they wanted you to do next.
[00:04:44] To take the next step on your journey to wealth and success, there was a three-day seminar.
[00:04:52] This wasn’t free; it was $1,495, but it wasn’t a cost. It was an investment in your future.
[00:05:03] If you weren’t prepared to invest in yourself and if you weren’t prepared to learn from Donald Trump and his hand-picked professors, well, as Trump himself put it in the promotional video, “you’re just not going to make it in terms of the world of success”.
[00:05:21] It sounded, well, convincing enough for thousands of people to take action.
[00:05:28] For a mere $1,495, they could take this first step, which was this three-day seminar.
[00:05:37] And in fact, as a special bonus, this three-day seminar included a “free” ticket for a friend, so really, if you were splitting the cost, it was only $750. A veritable bargain.
[00:05:52] But when the day came, and they yet again arrived at the designated hotel conference room, what they found was more of the same.
[00:06:02] Not much real estate training at all, no Donald Trump, and a lot of promotional and marketing material talking about how wonderful their life would be after taking the next step at Trump University.
[00:06:18] This three-day seminar wasn’t, after all, the final step.
[00:06:23] During those three days, they were told about the next stages.
[00:06:28] There was a series of “elite” packages that attendees could choose from: Bronze, Silver, and Gold.
[00:06:36] Bronze was only $9,995, Silver was $19,495, and Gold was $34,995.
[00:06:52] You didn’t get all that much with Bronze, but if you were prepared to shell out the full $35,000 for the Gold package, you got access to a bunch of retreats and seminars, as well as one year of mentorship from one of Trump’s hand-picked real estate professionals and access to Trump’s private deals.
[00:07:18] In fact, the entire three-day seminar, which, let’s not forget, people had paid $1,500 for the pleasure of attending, was essentially a sales pitch for these higher-priced elite packages.
[00:07:34] Over the 72-hour period, representatives from the university mingled among attendees, flattering them for taking the initiative, and congratulating them on what was no doubt going to be a lucrative and long career in real estate, if they chose the appropriate elite package, that was.
[00:07:56] After all, the cost of a package was minimal, considering the value you’d get out of it, and the money you’d make.
[00:08:04] It wasn’t a cost; it was an investment, an investment that your future self would thank you for.
[00:08:13] And thousands of people did take the next step, paying up to $35,000 for the most expensive “Gold” package.
[00:08:24] And what did they get? Well, even for those who had shelled out tens of thousands of dollars, many would later report that they didn’t receive what they had been promised.
[00:08:38] The retreats and seminars seemed to be further opportunities to be upsold, pressurised to buy additional packages and products. The mentorship was non-existent, and the real estate data they were given was public information.
[00:08:58] It was, to quote Marco Rubio, the former Trump critic, but now fierce ally and Secretary of State, “a complete sham”.
[00:09:08] There was nothing there.
[00:09:11] Now, selling a “get-rich-quick scheme” might be immoral and shady, but it isn’t illegal per se.
[00:09:21] The business model of Trump University, of the free seminar, upselling to one product before upselling again to a more expensive one, is still one that's in use today.
[00:09:34] Immoral it certainly may be but illegal it is not.
[00:09:39] The problem with Trump University was that it made several, perhaps unnecessary, errors.
[00:09:47] The first was with language.
[00:09:50] In the United States, like in many countries, it is the government that decides what can call itself a university. The word means something, and for an educational institution to call itself a university, it needs authorisation.
[00:10:09] Trump University didn’t have this.
[00:10:13] The second problem was also related to language, and it was that he promised there would be “professors and adjunct professors”. If something isn’t a real university, it can’t claim it has professors. I cannot suddenly declare someone to be a professor at Leonardo English University, and nor could Donald Trump declare one of his staff members to be a “professor at Trump University”.
[00:10:42] And the third problem was to do with these “professors”.
[00:10:47] In the promotional video, Trump boasted that these “best of the best” professors were all people who were hand-picked by him, which of course was a big selling point. Trump was the main attraction; he was the definition of success, and if he had personally chosen all the instructors, well, that was immensely valuable.
[00:11:14] The problem, it would later transpire, was that he hadn’t hand-picked anyone. When he was presented with a list of names of people who had “taught” at the university, giving seminars to people who had paid tens of thousands of dollars, in many cases, he didn’t know who they were.
[00:11:34] This all came to light in 2013, after the State of New York filed a civil lawsuit against Trump University for “illegal business practices”, essentially misrepresenting what customers were buying.
[00:11:51] Trump countered, with lawyers showing documents that the university had a 98% student satisfaction rate, and even building a website, 98percentapproval.com.
[00:12:05] As part of the court process, Trump University had to hand over a bunch of documents to support its claims and counter the allegation of illegal business practices.
[00:12:20] And what came out in the process was…enlightening.
[00:12:25] In terms of the 98% approval claim, prosecutors did admit that the number looked correct, but on closer inspection, something seemed fishy. Students who had given the course four or five stars, on a five-point scale, often left negative feedback, criticising the course, the instructors, and the high-pressured sales environment around it. It seemed strange for someone who was clearly unhappy with a product to give it such a high rating.
[00:13:01] What’s more, they looked at the refund rate on the programme, and found that 32% of people who went to the three-day seminar and 16% of people who bought the gold package requested a refund.
[00:13:18] Something didn’t seem to add up. If 32% of people request a refund, how can 98% of people say it was fantastic?
[00:13:29] It was almost as if they were only asking selected students to leave their feedback, pushing people hard to leave five-star reviews, or just fudging the numbers altogether.
[00:13:43] And in the document discovery process, Trump University was forced to hand over its internal documents. What emerged was that it was really much more of a sales organisation than an educational institution.
[00:14:01] The “staff” at the seminars were essentially sales-representatives, and they were tasked with pushing as many people as possible towards the expensive, “elite” packages.
[00:14:15] The 172-page internal handbook detailed some of the tactics they used and they were illuminating.
[00:14:25] One section was dedicated to handling objections, which are of course an important part of any sales job.
[00:14:33] But at Trump University, things were taken to their extreme.
[00:14:40] For someone who said that $35,000 was a lot of money, they were encouraged not to think about the $35,000 number, but rather only on the interest payments on their credit card, and of course they were all recommended to take out credit to pay for the course.
[00:14:58] For someone who asked about success guarantees, they were told to tell the prospect that they would be given all the tools and information for success, but the only thing stopping them was themselves.
[00:15:12] And for someone who suggested they were considering Trump University as well as other real estate investing schemes, they were reminded of Donald Trump’s personal success and wealth, and told–and I’m quoting directly–”Don't buy a Kia when you can have a Bentley.”
[00:15:31] But all of this would eventually catch up with Trump University.
[00:15:37] The legal problems started in 2013, with the Attorney General of New York filing a lawsuit against the institution, accusing Trump University of “persistent fraudulent, illegal and deceptive conduct.”
[00:15:53] And it wasn’t just New York.
[00:15:56] Two separate class-action lawsuits were filed in California, representing thousands of former students who claimed they had been misled and left tens of thousands of dollars out of pocket.
[00:16:10] The allegations were simple, but damning:
[00:16:14] Trump University wasn’t a real university.
[00:16:17] Its so-called professors weren’t professors at all.
[00:16:21] And the promises of mentorship, exclusive property listings, and insider access were simply false.
[00:16:30] As you might imagine, Donald Trump consistently denied any wrongdoing. He kept coming back to that alleged 98% approval rating, and when he decided to run for president, he continued this defence, even insisting that he would never settle the case.
[00:16:50] And yet, just days after being elected President of the United States, he did exactly that. He agreed to settle all three cases for $25 million, all without admitting guilt.
[00:17:06] For the thousands of former students, the settlement meant they would finally get some of their money back.
[00:17:14] For Trump, it meant the lawsuits would not hang over his presidency. And, for better or for worse, it worked, or at least it has been so outdone by everything else that has happened since then that it’s nowhere near the top of a list of scandals involving Donald Trump.
[00:17:33] Now, to wrap things up, the story of Trump University is, on one level, simply another “get rich quick” scheme, a classic upsell funnel dressed up with glossy marketing.
[00:17:47] Plenty of companies have used similar tactics, plenty of people have fallen for them, and plenty of people still do fall for them.
[00:17:57] But what made it a little different was the name.
[00:18:02] Donald Trump’s entire pitch was based on the power of his brand: “I am the most successful businessman in the world, and if you learn from me, you too can be successful.”
[00:18:15] That promise, that proximity to Trump meant proximity to wealth, was what persuaded thousands of ordinary Americans to part with their savings, to take out loans, in some cases loans that they are still paying off to this very day.
[00:18:32] Compared to a “real” university, there is a stark irony here, and an even greater one if we go back to the very first days of universities.
[00:18:44] To bring it back to the very start, as you may remember, the University of Bologna made no promises to its students, and the courses in grammar, rhetoric and logic were perhaps as far as you could get from vocational, practical business advice.
[00:19:03] Yet in reality, they prepared these young scholars perfectly for the careers they would go on to have in the church, in law, or in government.
[00:19:15] With Trump University, the entire premise was about giving people the skills they needed not just for professional success, but for vast wealth.
[00:19:26] And yet, for most of the people who attended, it taught nothing of the sort.
[00:19:32] According to a former sales manager at Trump University, “To my knowledge, not a single consumer who paid for a Trump University seminar program went on to successfully invest in real estate based on the techniques that were taught”
[00:19:49] In the end, Trump University lasted barely seven years.
[00:19:54] It collected an estimated $40 million in fees, returned $25 million in settlements, and the company was officially dissolved in 2017.
[00:20:06] Compare that to the University of Bologna, which has lasted almost 1,000 years, or almost any other of the tens of thousands of “official” universities worldwide that are still educating millions of students every year.
[00:20:21] It’s a reminder that words matter, and so does substance.
[00:20:26] You can call something a university, you can plaster it with the pictures of a famous businessman, you can fill a glossy brochure with promises, but if there’s nothing behind it, it won’t last a very long time.
[00:20:40] Perhaps what students of Trump University should have studied was the sales tactics of the organisation itself. It was clearly very efficient at separating vulnerable people from their hard-earned money, and had even made a 172-page handbook on how to do it.
[00:21:01] Unfortunately, that was a lesson that Trump University “graduates” would have to learn the hard way.
[00:21:09] OK, then, that is it for today's episode on Trump University, and with that comes the end of this three-part mini-series on the theme of “university”.
[00:21:18] I hope it's been an interesting one and that you've learnt something new.
[00:21:22] As always, I would love to know what you thought of this episode and from this mini-series in general. Have you ever fallen for a “get-rich-quick” scheme, or are there similar things in your country? What was your experience of university like and how could it have been better? I would love to know, so let’s get this discussion started.
[00:21:42] You can head right into our community forum, which is at community.leonardoenglish.com and get chatting away to other curious minds.
[00:21:51] You've been listening to English Learning for Curious Minds by Leonardo English.
[00:21:56] I'm Alastair Budge, you stay safe, and I'll catch you in the next episode.
