NPR news — The documents released in the lawsuit against Trump University paint an unflattering picture. And as NPR has reported, the political repercussions could be hugely damaging for the Trump campaign.
Beyond politics, Trump U’s moneymaking schemes highlight the lingering survival of a larger issue — cases of fraud in the for-profit college industry. A lot of the Trump U strategies sound like they were pulled straight from the playbooks of those colleges. But is that a fair comparison?
One huge difference between Trump University and the broader for-profit industry is that Trump’s “school” was not actually a university at all. In fact, New York’s Department of Education requested that the enterprise drop university from its namein order to continue to do business in the state. It didn’t offer degrees; it was not accredited; and its students were not eligible for federal financial aid.
“With the exception of the word ‘university,’ there’s nothing it has in common. They’re just completely different,” said Noah Black, a spokesman for Career Education Colleges and Universities, which represents for-profit colleges. “It’s an attempt by people opposed to having the private sector in education to confuse people into thinking our institutions have anything in common with Trump University,” he added.
Not everyone agrees with that. “Obviously Trump University invoked the term ‘university’ euphemistically,” said Barmak Nassirian, director of policy analysis at the American Association of State Colleges and Universities, which advocates for public higher education institutions.
In terms of its tactics, Nassirian said, it’s “mostly a matter of degrees” that separate Trump University from degree-granting for-profit colleges. For-profit colleges differ from other post-secondary institutions in that, unlike their not-for-profit counterparts, these schools are businesses. Tt means they’re looking to make money.
They’ve been good at it for a while. The for-profit industry saw a boom from 1998 to 2008, when enrollment more than tripled. By 2012, 10 to 13 percent of all college students attended a for-profit school, according to a Senate report that year, which examined the for-profit college industry.
Since then, the industry has been scrutinized. Last summer, the U.S. Department of Education made a “gainful employment” rule, which requires for-profit colleges to prove they prepare students for well-paying jobs before they can be eligible for federal student aid. A few months later, a federal judge told for-profit Corinthian Colleges to pay more than $500 million to the Consumer Financial Protection Bureau for defrauding students.
The industry has taken a hit. At four-year for-profit schools, enrollment is down by nearly 10 percent. But despite the damage, these schools are not going away. More than 1 million students nationwide attended for-profit colleges this spring.
“The business model has not changed,” Nassirian said. “In many ways, the Trump case was chump change.”
High cost, high debt
A former Trump University manager testified that the school “preyed upon the elderly and uneducated to separate them from their money.” Sometimes, it was an aggressive separation, with Trump University employees pressuring customers to spend as much as $35,000 for retreats, online training and three days of in-person mentoring in the field.
Those who have come forward against the program sound like normal people trying to catch a break. One woman told the New York Daily News: “I wasted my entire life savings on Trump.” The expensive courses aren’t new. The for-profit industry in general is one where high cost — and lots of debt — are common.
This year, the average tuition at for-profit colleges was more than $15,000, compared with around $3,000 at community colleges, $9,000 at in-state public universities, and $30,000 at private nonprofit universities.
Though not the biggest price tag, the high cost of for-profit colleges — and the longer amount of time it takes for students to finish them — means more borrowing. A ProPublica analysis of the 2012 Senate report found that 96 percent of students at for-profit schools borrow money.
Student loans, however, are common in every higher education sector.
“At almost any nonprofit or public institution, there is debt,” said Black of the group that represents for-profit colleges. “Our schools don’t necessarily encourage students to take on debt.” Encouraged or not, at for-profit schools, many students aren’t able to pay that money back. Of the student borrowers nationwide who default on their loans, 70 percent attend either for-profit colleges or, to a lesser extent, community colleges, according to a paper presented by the Brookings Institution last fall.
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