Billionaire NBA Team Owner Mark Cuban Funded His College Tuition By Running A 'Scam’

The dorm room scheme that turned Mark Cuban into a master of risk and reward.

Jesse

• Published in Interesting
• October 22, 2024

College life is a time of late-night study sessions, stretching every dollar to its limit, and making questionable decisions that, more often than not, result in hilarious stories later in life. 

We’ve all heard the classic tales: ramen-for-every-meal diets, splitting rent in overcrowded apartments, or working two part-time jobs just to survive. But what if I told you one of today’s most successful billionaires pulled off one of the most audacious hustles during his college days? 

Imagine being a broke college student in the 1980s, scraping together every last cent to make it through the year. The idea of forking over hundreds of dollars for textbooks, rent, and tuition feels like an impossible mountain to climb. 

And then, an opportunity hits you like a bolt of lightning. Something wild. Something that could either make you some serious cash or blow up spectacularly in your face. 

Do you take the risk? Or do you play it safe, hoping some other miracle will come your way?

Mark Cuban, a name now synonymous with entrepreneurial genius, took the risk. But this wasn’t your run-of-the-mill college side hustle. No, young Cuban orchestrated a chain letter Ponzi scheme that helped him pay for his junior year at Indiana University. And yes, it’s just as wild as it sounds.

Mark Cuban reflects on his college days: “It was amazing,” he says of the '80s Ponzi scheme that helped him make it through school. Fortunately, he ensured his friends all got their money back.

On a recent episode of the “Life in Seven Songs” podcast, Cuban shared this nugget from his college days, reminiscing with a laugh about how he devised the plan. 

The premise? Ask fellow students for $100, keep $50 for yourself, and then use the remaining money to keep the chain rolling. According to Cuban, it wasn’t exactly foolproof, but hey, it worked. It worked well enough to fill his dorm mailbox with cash and, more importantly, get him through the year.

“It was basically a scam,” Cuban admitted, reflecting on the cleverness—and, let’s be honest, sketchiness—of his plan. But for Cuban, this wasn’t just about quick cash. It was about survival. 

Coming from a working-class family, he didn’t have the luxury of financial safety nets. His father occasionally slipped him a $20 bill, but that wasn’t going to cover college expenses. So, Cuban did what Cuban does best—he figured out a way.

Remarkably, despite the sketchy nature of his operation, Cuban made sure his friends weren’t left high and dry. He made a point of ensuring they got their money back, minimizing the damage, and avoiding a true disaster. Once everything was said and done, Cuban used what was left over to cover his tuition.

Mark Cuban reflects on that period of his life as a crash course in both survival and ingenuity. "It gave me confidence," he said, and once he discovered his knack for selling and turning a profit, he became "excited about business and reading about business. This set him on a path that would shape the rest of his career.

Jesse