August 27, 2013--Trump You

Is it any surprise that The Donald is likely involved in a fraudulent "education" enterprise--Trump University, if you can believe it.

But then he is most famous for putting his name on everything from a line of tacky men's clothing to numerous gilded hotels and gambling casinos, golf courses, TV reality shows, and of course cheesy housing and office towers. So why not on a "university"? Especially one that is as much a scam as most of his other ventures.

The New York Attorney General is charging that Trump U is a version of an educational ponzi scheme and is seeking $40 million in restitution for thousands who it is claimed were defrauded by Trump's false claims. In response, eloquent as ever, Trump yesterday called AG Eric Schneiderman a "light weight." Clearly not something anyone would think about calling the ever-inflating Donald.

It is alleged that potential students were drawn into the scheme by first offering access to a free seminar in real estate investing and then from that into a $1,495 (not $1,500) three-day "seminar" which was in fact an "upsell" to increasingly expensive "Trump Elite" packages that could cost up to $35,000 per course and which promised at least some access to Trump himself. 

But of course, as in other classic bait-and-switch scams, things did not turn out as promised. In this case, if students wanted to see Trump rather than finding him in the seminar room, they had to watch "The Apprentice" or check him out on Fox News when he was ranting about Barack Obama's college transcript and birth certificate.

In the spirit of fair-and-balanced, I should note that education scams are sadly not that unusual. There are too many examples of even legitimate institutions of higher learning engaging in shoddy and corrupt practices--like Trump, in order to make money.

My personal favorite occurred in the 1970s when Touro College in New York City bought four nursing homes from Dr. Eugene Hollander, Touro board chair, for $29 million and then leased them back to him to enable him to raise his Medicaid rates so that he could cover the cost of his lease and pay Touro at least an additional $100,000 a year while making a fortune for himself. (Hollander pleaeded guilty to Medicaid fraud, was put on probation for five years, and fined $1.0 million.)

Perhaps flush from its profitable nursing home experience, also in the 1970s, also seeking to make as much money as possible to support its expansion plans, Touro enrolled as adult students hundreds of low-income elderly people, some of whom could not read or write English, in its adult-education programs. Investigators asserted that the programs had been established primarily to help students obtain federal Pell as well as NY State Tuition Assistance Grants so they could pay Touro's tuition. Needless to say, the college, scamming, did not provide anything resembling classes in the nursing homes in which its "students" resided.

My actual favorite higher education scam was an only-slightly facetious program under consideration at a unnamed university well known for its adult degree offerings. 

Under pressure from the host institution to collect as much tuition and fees as possible and spend as little as possible on underpaid part-time faculty, the adult division came up with a number of innovative courses that met at numerous off-campus locations at day and evening hours seven days a week. 

Though it was a thriving enterprise, the adult division came under pressure to provide more-and-more income to feed the overhead of the rest of the university. So much so and so relentlessly that staff proposed a program that would bring in considerable  income but require no expenditures--that it would be an all-profit venture--The Special Degree Program for the Previously Living.

The staff enjoyed the macabre process of developing the curriculum (there were, for example, no political correctness problems with literature courses devoted exclusively to DWMs--dead white males) and writing promotional copy ("learning that lasts an eternity"); but the central administration who at first misread the euphemistic name of the proposed program gave it careful consideration before getting the joke. 

On the other hand, they redoubled their efforts to pressure the dean of the adult division to consider devising programs for the elderly who, because of their low-income status, would be eligible for Pell Grants and  . . .