The True Costs of Training at a Private Career College

    Ed Popkie, 5th Wheel Training Institute

    The true costs of running equipment training at a private career college:

    Everyone knows it’s expensive to own, maintain and insure a car.  So what do you think it costs to own, maintain and insure heavy equipment?   What about class 8 dump trucks?  How about a tractor-trailer combination?  Plus, what if you used your equipment provide truck driver training and heavy equipment operator training to new drivers and operators?  Let’s have a look at these costs.

    I’ll start by reviewing the costs to operate a tractor-trailer combination.  Most good used tractors will cost you anywhere from $65,000.00 to $100,000.00 and a used van-trailer with tandem axles approximately $20,000.00 to $30,000.00.  New, you could easily invest $200,000.00+ for a tractor – trailer combination.  Let’s stick with the used pieces for now.  On average, you will invest around $107,500.00 for a set that is within a few years of age and still in good running condition.   Training new truck drivers safely day after day is hard on many components and a tractor-trailer combo that is too old will be in the shop steady.  When the truck is in the shop, students are not learning…

    Estimated costs to operate your tractor-trailer combination per hour:

    Depreciation:

    $107,500.00 x 15% in the 1st year of acquisition = $16,125.00

    $91375.00 x 30% in the 2nd year of operating = $27,413.00

    When added together, we’ll get depreciation costs of $43,538.00 in the first two years of ownership or an average of $21,769.00 per year.   Total run time of 2000 hours per year for a full time truck driver instructor would have depreciation costs hovering around $11.00 per hour.

    Insurance:

    Average $10,000.00 a year for a truck and trailer combination.

    The longer your school is in business with no claims, the better the rate you’ll be able to negotiate for insurance premiums.   Most Private Career College’s start out with 1 truck and 1 trailer and have to pay the higher premiums for a few years until they have demonstrated that they are a low risk training school and have earned a better rate from the insurance industry.

    Total run time of 2000 hours per year for a full time truck driver instructor operating this combo would have insurance estimated at $5.00 per hour.

    Maintenance:

    Usually, a tractor can be maintained for around $15.00 per hour of run time and a trailer around $5.00 = approximately $20.00 per hour for each hour of operation.  Of course the operating conditions; weather, loads, etc will all have an effect on the overall maintenance costs, but for my example I’m assuming costs similar to those incurred @ 5wti…entry level drivers learning to drive on mainly paved roads with empty trailers for 80% of their road time.

    Fuel:

    Assuming an empty trailer, predominately town-city driving, and lots of shifting practice at 60 km/hr road speeds, you can expect use approximately 7.5 litres of fuel per hour.  Again, under different conditions, you could use more or less.  But for this example, 7.5 litres per hour of operation is very close to our 5wti numbers.  So, multiplied by clear fuel rates that average around $1.40 per litre, you could expect it to cost around $10.00 per hour for diesel.

    Instructor wages:

    Wages for instructors will vary due to a number of factors.  The average instructor would likely get paid $18.00 per hour + overhead costs (WSIB, EHT, private benefits, performance pay, PPE, employer paid portion of EI + CPP premiums, payroll preparation expenses, etc.).  The end result to the school will likely be an hourly expense averaging $24.00 per hour.  Again, some will spend less, and some will spend more.

    So let’s add this up…
    Depreciation:                   $11.00
    Insurance:                          $5.00
    Maintenance:                   $20.00
    Fuel:                                  $10.00
    Instructor wages:           $24.00

    My number adds up to $70.00 per hour for direct tractor-trailer and instructor costs.  This number does not allow for any dollar amount to pay for a school’s Private Career College mandatory financial auditing, letters of credit, TCAF premiums, PCC annual renewal fees, administration, sales and marketing, classroom, general operations, etc.  There are no profits to reinvest in the school and the owners have not made any return on their investment.  If these costs are added to the equation you would have to charge out your tractor-trailer combination and instructor for anywhere’s on the low side of $125.00 per hour to on the high side $175.00 per hour.

    Every PCC Program as of September 2011 was mandated to deliver a minimum of 50 hours of behind the wheel training to each student (1:1 ratio) plus and additional 40 hours of practical yard training (can be up to 4:1 ratio).  90 hours of truck training at $70.00 per hour would cost a school $6,300.00 to train a single student in the practical tractor-trailer portion of a 200 hour Class AZ Tractor Trailer Training Program.  Tuition of $7,395.00 for an AZ Program would only leave $1,095.00 remaining to complete the rest of the 110 hours of the program (classroom, group work, independent study, labs)…this would be very challenging to do for groups of 1 or 2 students.  For most small PCC’s, impossible.

    This financial scenario repeats itself over and over again when you look at offering training on other pieces of equipment to small groups of 1 or 2 students:

    • Bulldozers
    • Backhoe-loaders
    • Graders
    • Dump Trucks
    • Excavators
    • Fork-lifts
    • Elevating work platforms
    • Skid steers
    • Telehandler

    So the next time you look at the cost of training at a Private Career College and ask yourself, “why does it cost so much for the tuition?”…get your calculator out and do the math.  You’ll quickly realize how much it costs to deliver these programs.  Schools that offer this training to small groups of 1 or 2 students at a time will have a tough time generating enough tuition to pay for all the expenses involved in delivering the complete program…and will have no money left to pay for the many Private Career College overhead costs.

    Choose your school wisely…because now you know the true costs of running equipment training at a private career college!

    – ED POPKIE

    AUTHOR

    fifthdev

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