With more and more students completing the Victorian Certificate of Education (VCE) every year, the VCE marketplace for tutors is becoming a growing and highly competitive environment. Each year, high-achieving high school graduates enter the market in hopes of selling their tutoring services to an increasing demand of students who are looking to gain a competitive advantage over their fellow peers.
The students who become tutors are usually the top performers in the state. The top 9 per cent of students in a subject achieve a study score of 40 or above, with 50 being the maximum study score a student can receive. Of the 50,884 students who completed the VCE in 2017, only one in three achieved at least one study score of 40 or above.
High study scores can translate into a high Australian Tertiary Admission Rank (ATAR), which provides an overall measure of a student’s relative performance in their VCE in relation to other students. The average ATAR was 65.10 in 2017, and only 36 students attained the maximum rank of 99.95. Fittingly, tutoring companies such as Crimson and Connect Education hire many tutors who have achieved perfect study scores, Premier’s Awards and ATARs above 90. The tutors also come from top VCE performing schools, which include selective entry schools, grammar schools and colleges. Coincidentally, these former students may have also benefited from intensive tutoring and a well-resourced school.
Connecting tutors to students
A significant amount of advertising by tutors is done in online spaces such as VCE DiscussionSpace, Gumtree, Better Education, Tutor Finder and LearnMate. In these marketplaces, VCE study scores are often used as the main signal to convey tutors’ quality and expertise in tutoring the relevant subject. Potential students lack knowledge of important factors such as tutors’ teaching and communication skills, as well as their reliability and motivation for tutoring. Accordingly, tutors advertise their VCE results to enhance their credibility and overcome the asymmetric information problem in the VCE tutor-student market. Given any year, someone who achieves a VCE study score of 45 or higher will be in the top 2% of the state. Therefore, clients are able to use study scores as a standardised measurement to compare the VCE performance of tutors across multiple years.
However, having a high study score alone is not enough to sustainably compete in the market. To further distinguish themselves from their competitors, tutors are also listing their ATARs, years of tutoring experience, past student performance, university subjects, scholarships, awards and participation in competitions such as International Olympiads.
Due to the private tutoring market being saturated with tutors with study scores above 40, aspiring tutors with scores below this may be inclined to be less transparent about their VCE results when advertising to potential students. For instance, they may choose to attract students in a way that doesn’t require VCE results to be disclosed outright, such as gaining employment at a tutoring centre.
According to listings from the five previously mentioned tutor advertising sites, the average price difference between a tutor who received a VCE English study score of 40 and a tutor who received score of 50 is $14.46. This result strengthens the belief among students that tutors who achieve a higher study score are more likely to be qualified in tutoring the subject. Aside from the location of tutors also being an important factor, the academic performance of tutors plays a significant role in price setting and its use as a signal helps students avoid the adverse selection of less capable tutors.
Economic opportunities for the best and brightest
Higher-achieving students tend to be the ones who are more interested in and capable of offering tutoring services. A variety of benefits motivates these former students to become tutors. The higher the study score achieved by the tutor, the higher they can charge for their tutoring services.
The average price charged by tutors with an English study score above 39 was $40 per hour. Compared to university students who may work in the retail or hospitality sector and earn the national minimum wage of $18.29 per hour, high-achieving tutors have the potential to earn $21.71 more in cash without tax deductions. While the price of $40 per hour may seem steep for someone who has just graduated high school, evidence has been documented that “students from wealthier families are more likely to receive private tutoring”. Potential students from these families might have a higher reservation price and may not mind forking out more than the norm if it means being able to learn from the best performing tutors.
In addition to offering tutoring services, high achievers will also find their study material in high demand. Many tutors are selling their practice essays, past school assessed coursework (SACs), exam revision notes, as well as sample exam responses and tips. For as long as the tutor has access to the original copy of these notes, they will be to make a profit off the infinite supply of these subject resource packages and benefit from a perfect price elasticity of supply. A number of tutors have also capitalised on the growing student demand for private tutoring from top students by creating their own tutoring companies. Tutoring companies such as LearnMate Tutoring, Connect Education and Crimson Education have been founded by former students and recruit tutors who have also performed strongly in the VCE.
In today’s VCE tutor marketplace, tutors must build a desirable academic reputation for themselves to attract more students. The private tutors with the highest demand tend to be former students with the highest VCE results. Many students are requesting private tutoring services from these tutors to boost their study scores and ATARs. Since students who receive tutoring tend to perform better academically, it suggests that the teacher’s apple doesn’t fall far from the tree.
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