The Associated Press reports that the agreement ends nearly seven years of legal battles with customers who claimed they were misled by failed promises to teach them how to succeed in real estate.
The ruling by U.S. District Judge Gonzalo Curiel in San Diego settles two class-action lawsuits and a civil lawsuit by New York Attorney General Eric Schneiderman.
Trump had vowed never to settle but asserted after the election that he didn't have time for a trial, even though he believed he would have prevailed. Under terms of the settlement, he admits no wrongdoing.
The lawsuits alleged that Trump University gave nationwide seminars that were like infomercials, constantly pressuring people to spend more and, in the end, failing to deliver.
The controversy dogged Trump throughout the presidential campaign as rivals used his depositions and the extensive documents filed in the lawsuits to portray him as dishonest and deceitful.
Trump brought more attention by repeatedly assailing Curiel and insinuating that the Indiana-born judge's Mexican heritage was evidence of bias.
Attorneys say former customers will get at least 90 percent of their money back, based on the roughly 3,730 claims submitted. The attorneys waived their fees, and Schneiderman contributed $1.6 million of his $4 million portion of the settlement to the customers, raising their payouts.
Schneiderman says the ruling "will provide relief — and hopefully much-needed closure — to the victims of Donald Trump's fraudulent university."
"Trump University's victims waited years for compensation, while President Trump refused to settle and fought us every step of the way — until his stunning reversal last fall," he says.
The judge rejected a request by a Florida woman who argued that she should have been given more opportunity to opt out of the settlement. If he had agreed, the prospect of more litigation would have likely derailed the deal.