Is a $15,000 Diploma better than a $5,000 one?

NO

Whether a Diploma of Counselling for example costs you $5,000 (and sometimes even less) or $15,000 the qualification you get at the end is the same.  They are both assessed against the same criteria with the same evidence requirements and delivered by a providers that all operate under the same standards and the same legislation.  They are identical.

Let me tell you a little story, in 2012, when I was the Chief Learning Officer at a very large NFP which was also a RTO, who not only did internal training, but also a fairly high volume of training for external clients as well, we increased our scope to include some new Diploma and Advanced Diploma level courses at the same time as applying for funding under the then National Workforce Development fund.  There was a huge amount of discussion at the time about pricing, what was fair and reasonable, where the market was, what level of funding the government would accept and a range of other issues.  So in the long run we settled on $5,000 for our Diploma level Qualifications and between $8-10,000 for our advanced diplomas, which was pretty much the standard in the sector at the time.    That was 3 years ago.  

We have seen a 300% rise in the costs of Diploma’s in 3 years

I mean really, even house prices don’t go up that quickly in an inner Sydney suburb.  The real rub here is that nothing else apart from the cost has changed, nothing at all.

So back to my initial question.  I get really quite upset when people say that a $15,000 Diploma is better than a $5,000 one.  The Diploma’s and advanced diploma’s at the provider I now run, range from $3,500 to $9,000. We are of course part of a larger community services organisation, we own our own facilities and have quite a lean flat structure and the reason we try to keep our prices lower is because we believe in community inclusion and that everyone deserves a chance to be able to do the things in life that want and need to help them grow and prosper and that includes learning. We as a NFP make a modest surplus because after all we need to be sustainable (it’s not for profit not for a loss after all), have state of the art equipment in all of training facility, and in terms of our online services,  pay our staff well and have outstanding completion and employment outcomes for our students, both are over 90% .  The only difference between a Diploma with us and Diploma with someone else is the profit margin.

Well that is not entirely true, I would stake our training and outcomes against all comers.  Our training is done within an organisation that delivers, mental health and disability support, counselling, health and fitness and a range of other services.  Students are embedded in culture of community services from the time they walk in the door, and this is the case with almost all of the NFP providers out there.  Now I am sure that there are some shonky providers at the lower price end of the market, just as I am sure there are some high quality providers at the high profit end of the market, but judging the value and worth of a qualification in the price you paid for it (even if that price is a loan you are never likely to repay) is an exceedingly stupid way to decided on where you are going to get a quality education.

Anyway that is just my opinion.

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About pauldrasmussen
Paul Rasmussen is one of Australia’s most widely read Vocational Education and Training Commentators. He provides deep, unbiased analysis and insights not only on topical issues, but also on the underlying structure and policy which supports the industry. His writing and analysis has been praised for its uncompromising and thought provoking style and its ability to focus on the issues of real importance to the sector. He has advised various government departments and ministers, training providers, public and private organisations, not for profits and small to medium enterprises on the VET sector and the issues and opportunities facing it. He is one of Australia’s most awarded learning professionals and a regular speaker at a range of conventions and forums. His extensive experience in vocational education, and learning and development coupled with formal qualifications in philosophy, ethics, business and education management allow Paul to provide a unique view of the road ahead and how to navigate it.

7 Responses to Is a $15,000 Diploma better than a $5,000 one?

  1. basdenleco says:

    Your article certainly resonates personally with me after investigating obtaining educational diploma qualifications.
    Price definely does not equate to quality

    • pauldrasmussen says:

      What really annoys me at the moment is a qualification that I could have obtained 2 years ago has in some cases quadrupled in cost, for no apparent reason except for the face that there needs to be bigger profit margins and to build in the cost associated with brokerage marketing. They are selling exactly the same course they were selling 2-3 years ago it just costs sooooooo much more now.

      • trevor@yvn.com.au says:

        What is of most concern is not necessarily what the course costs but also the time taken to do the course. There are some courses at cert 4 level being advertised at $150 – $300 being run over 3 to 6 months. Many of these will offset the course through government funding but is the instruction time going to be enough?

        For a trainee to learn means a significant investment in their own time, are they going to do that in today’s time poor society?

        Anyway there is an entire can of worms in this topic

  2. Amy Boleszny says:

    Quite often the top priced courses are using the same commercial online sites like Catapult as some of the lower priced courses, so there is no justification for claiming greater fixed costs. My resources are self authored.

    I pay my staff the same rates as TAFE, but I have heard that some of the top price providers pay their staff badly.

    The difference is the profit margins.

  3. Jenny says:

    Doesn’t have anything to do with the demise of low cost TAFE courses by any chance?

    • pauldrasmussen says:

      Jenny, I don’t know whether or not the two are related and i also guess it depends on what you mean by low costs. I know one of the issues that TAFE in QLD has faced in some market sectors has been that their student contribution rates have been much higher than those in the non-public sector, in particular the NFP sector where the co-contribution fees are as low as sub $50 for a course. I think the reason we have seen such a rise in fee in the VFH area is simple, there are some education brokers out there (which are not only used by the nonpublic sector but by TAFE) that are charging up to 40% of the full cost of the course in commissions. So if we look at a $15,000 Diploma and take off 40% as broker commissions ($6000) and say 30% profit margin ($4500) that means that delivery of the program on actually costs $4500, (and I think I am being quite conservative on the 30% profit margin) If it wasn’t for the broker the Diploma would only costs $10,000. At a 25% profit margin a $4500 delivery cost program comes in at $6000. Not that I am suggesting brokers are entirely to blame, but I think there is a case to be made that one of the reasons that costs are so high are the commission rates being paid to brokers.

  4. Vinay says:

    If I were to pay more, I would expect more support..! However students do associate low cost = budget and high cost = more value ! I think Fee for Service vs FEE-HELP ( and the added regulation) also comes into the costing of the diploma!

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