The settlement was announced by the New York attorney general just 10 days before one of the cases, a federal class-action lawsuit in San Diego, was set to be heard by a jury. The deal averts a potentially embarrassing and highly unusual predicament: a president-elect on trial, and possibly even taking the stand in his own defense, while scrambling to build his incoming administration.
It was a remarkable concession from a real estate mogul who derides legal settlements and has mocked fellow businessmen who agree to them.
But the allegations in the case were highly unpleasant for Mr. Trump: Students paid up to $35,000 in tuition for a programs that, according to the testimony of former Trump University employees, used high-pressure sales tactics and employed unqualified instructors.
The agreement wraps together the outstanding Trump University litigation, including two federal class-action cases in San Diego, and a separate lawsuit by Eric T. Schneiderman, the New York attorney general. The complaints alleged that students were cheated out of thousands of dollars in tuition through deceptive claims about what they would learn and high-pressure sales tactics.
“I am pleased that under the terms of this settlement, every victim will receive restitution and that Donald Trump will pay up to $1 million in penalties to the State of New York for violating state education laws,” Mr. Schneiderman said in a statement. “The victims of Trump University have waited years for today’s result, and I am pleased that their patience — and persistence — will be rewarded by this $25 million settlement.”
The settlement is a significant reversal from Mr. Trump, who had steadfastly rejected the allegations and vowed to fight the lawsuits, asserting that students filled out evaluations showing they were mostly happy with what they had learned in seminars. When political opponents pressed him on the claims during the campaign, Mr. Trump doubled down, saying he would eventually reopen Trump University.
“It’s something I could have settled many times,” Mr. Trump said during a debate in February. “I could settle it right now for very little money, but I don’t want to do it out of principle.”
He added, “The people that took the course all signed — most — many — many signed report cards saying it was fantastic, it was wonderful, it was beautiful.”