The Many Trump Universities


June 6, 2016

By Steven Isaacson

Donald Trump has been making front page news again, this time for Trump University amid comments from former instructors and students describing the institution as “a fraudulent scheme” and “a total lie.”

We ought not get caught up in the idea of Trump “University” being an actual institution of higher learning, however. It granted no degrees, held no accreditation, and received no direct taxpayer money. It was simply your standard get-rich-quick business scheme.

Surprising parallels do exist, however, between Trump’s venture and actual colleges and universities that do grant degrees, do hold accreditation, and do receive substantial taxpayer support.

For years, degree and certificate granting, accredited for-profit colleges that get billions in federal funds have used many of the same recruiting tactics, organizational structures, and sales pitches as Trump University. In fact, many proprietary schools exploit the same low-income people – bottom feeding off of the hopes and dreams of folks who find themselves in dire financial situations. See the video below for examples.

And just like Trump University, the results at most for-profit colleges have been disastrous. A study released just this week revealed that associate’s and bachelor’s degree-seeking students attending for-profit colleges like the University of Phoenix, “…experience a decline in earnings after attendance.”

You might think it’s the “profit” part of Trump University and the for-profit education business model that’s the problem. Whereas not-for-profit schools are theoretically liable to those they serve, for-profit institutions are accountable to shareholders. Profit comes before education in their eyes.

Guess what, though? Non-profit colleges are not always so great.

According to a recent report by Third Way, the average private non-profit college graduates only 55 percent of freshmen within a six-year period. On average, only 63 percent of students with federal loans earned more than the average high school graduate without a college degree six years after starting.

We see similar stories with colleges in the public sector. Consider Ohio University-Southern, for example, that has only a 12 percent graduation rate– again measured six years from initial enrollment, not four. In fact, there are over two dozen other public colleges and universities that have six-year graduation rates below 20 percent.

Obama’s legacy on this issue is clear.

The most lasting aspect of President Obama’s higher education agenda just might prove to be heightened examination of college and student outcomes in addition to work on traditional access and affordability issues. At the forefront of Obama’s college quality efforts were his executive actions to ensure minimal standards for post-secondary vocational programs.

Based on his initiatives, including language that clearly defined “gainful employment,” spending on instructional services instead of marketing, sales, and raw profit at for-profit colleges is up 25 percent. Degree completion rates at four-year for-profit colleges are up nearly 40 percent.

By and large, all colleges – whether they are for-profit, non-profit, or even public – need federal funds in to survive. But they shouldn’t get a blank check from the federal government to take in students, add to the already growing amount of national student debt in this country, and then not be held accountable for failing to provide their students with meaningful opportunities to make a living post-enrollment.

So here’s our challenge for the next President:

Minimum quality standards for institutions of higher education should be set in exchange for access to federal funds. Give colleges time and help to improve first, but improve they must. A 12 percent graduation rate, or put another way, an 88% dropout rate year after year with no improvement is not acceptable.

Scams like Trump University exist in our real higher education system as well. And like Trump University, many colleges have faced or eventually will face an existential crisis.

Steven Isaacson is a Research and Communications intern with Education Reform Now.