The USD 25 million settlement, approved in March, had been threatened by a lone objector, Florida lawyer and Trump University attendee Sherri Simpson, who wanted to opt out and take President Donald Trump to court on her own.
Simpson, along with thousands of other class members, had initially agreed to take part in the settlement, but then objected that she was denied a second opportunity to opt out of the case.
But the Ninth US Circuit Court of Appeals in San Francisco said the US District Court for the Southern District of California that approved the deal had "acted well within its discretion," given the fairness of the settlement as a whole.
Two class-action suits were launched in California in 2010 by former students who claimed they had been deceived by false marketing, and a suit was brought by New York state attorney general Eric Schneiderman in 2013.
Students paid as much as $35,000 to enroll at Trump University -- in operation from 2005 to 2011 -- wrongly believing they would make it big in real estate after being taught by the Manhattan property tycoon's hand-picked experts.
After months of insisting he was ready to go court to establish his innocence, Trump made an about-face after his November 2016 election and agreed to pay up to save him the embarrassment of further legal wrangling.
"We're obviously thrilled that the Ninth Circuit rejected Ms Simpson's objection and agreed with Judge Curiel that our USD 25 million settlement -- which we reached nearly a year and a half ago -- is fair and reasonable," said Amber Eck, a lawyer representing some of the plaintiffs.
"This has been an incredibly long, hard fight -- and today's ruling brings thousands of Americans one step closer to finally putting Trump University behind them," she added.
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