After Trump University, Why Not Sue All Colleges?

Trump University was one of Donald Trump’s entrepreneurial ventures, a real estate educational program in operation from 2005 to 2010. Live events and in-field mentorships promising to teach students Donald Trump’s real estate techniques, taught by his “hand-picked” professors. A lawsuit alleged false representations, as Trump himself had no significant involvement in the educational event content or instructors. The title of “university” was also claimed to be misleading as Trump University was not accredited as such.

Donald Trump settled the lawsuit post-election for $25 million, claiming he “Did not have the time to go through a long but winning trial on Trump U. Too bad!” Would he have prevailed at trial as he asserts? Who knows? He is correct that as President-elect transitioning himself and his leadership team into the White House, the distraction of a trial and associated media spectacle is the last thing he needed.

Looking closer at the complaints against Trump University, the primary allegation is fraud. According to students and instructors, “Some of whom described the program as a scheme to cheat customers out of thousands of dollars.” Also high pressure tactics, “Tapping into the roller coaster of emotions to get students to sign up.”

Let’s compare all of this to “real universities” and colleges and other institutions of higher learning across the US. Counting both two and four year institutions, public and private, just over 4700 such institutions dot the US landscape.

Why attend college? Several reasons. Job opportunities, security in a changing economy, higher income, and family stability. Similar to the promises of Trump University?

This current academic year, nearly 4 million will graduate with degrees ranging from associate to doctor. What are their prospects in an anemic economy with a record low labor participation rate of under 63 percent? Never mind the media-touted unemployment rate which only counts those actively looking for a job. The market that college graduates find themselves in is one where a third of those who could be working are not. The new grads join 94 million Americans currently outside the labor force.

How are the millennial grads faring in the workplace? They make up 40 percent of the unemployed, about 14 percent of them without a job. Of those employed, how many are on a career path versus just working a job to pay the bills? Was this their expectation when signing up for college?

Waiting tables, brewing lattes, or driving an Uber are jobs but not careers. Not providing the higher income, job opportunities, and family security we are repeatedly told only a college degree can provide.

College tuition is not cheap. Everyone complains about rising healthcare costs but the reality is that college tuition is increasing at twice the rate of healthcare costs. 44 million Americans have student loan debt, $37,000 on average with a total of $1.26 trillion in outstanding loan debt. The average loan payment per graduate is $351 per month.

Assume a starting salary, for those lucky enough to land a real job after graduation, of $40,000 a year. After tax this translates to about $2600 a month. That student loan payment will take a sizable chunk of that paycheck. Don’t forget rent, food, transportation and some entertainment. And good luck if your first job is an unpaid internship. What about supporting a family, buying a house? Tough to do along with those loan payments..

How many college grads are working a job where a college diploma was not needed? According to Forbes, half of college graduates are working jobs that don’t require a degree. Meaning those four plus years at school, tuition, and loan debt provided little more than a fun social experience and a chance to suffer micro-aggressions over the latest social justice outrage.

Even the Washington Post acknowledges, “More than 4 of 5 new grads leaving college without a job.” They correctly observe, “that the entry-level job market has changed, but colleges have not adapted.”

In other words, the vaunted American institutions of higher learning are failing their students, those paying hefty tuition based on promises of jobs, income and security. Sound familiar? Aren’t these the same allegations made against Trump University?

Two solutions. For Trump U and the rest of US universities. Let the market work. Caveat emptor. Let the buyer beware. Students can do their own research and due diligence before spending money on any university, whether Trump or Cornell. What will their return on investment be? Could their money be better spent on other forms of education?

If potential college students decide trade school is a better deal, then colleges can adjust to the reduced demand. A plumber can earn $50,000 a year without the time and expense of a college degree.

The other option is the Trump University lawsuit approach, a class action lawsuit against American universities. Same tactics used against Trump U, false claims and fraud. Classes taught not by the Nobel laureate on campus but instead by some grad student. Classes of several hundred in a lecture hall, not the group of ten students sitting around the table with the professor. Online classes with students interacting with their laptop rather than a professor and fellow students.

A potential fortune to be earned by the class action lawyers chasing a piece of the $400 billion spent annually on tuition in the US.

The worst outcome would be for the government to take over higher education as they have done in other countries. We know how that works. Government regulates and controls healthcare here in the US. If you like your professor you can keep your professor. How has that worked out?

Trump University is simply a microcosm of a much larger problem with American higher education. A low value proposition, luring students via fear and unrealistic expectations, followed by a failure to deliver on promises, leaving students holding an expensive bag of loans with low prospects of paying them off.

Any hungry lawyers out there?

Brian C Joondeph, MD, MPS, a Denver based physician and writer. Follow him on Facebook  and Twitter.

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