Except for the "cheap" part, if the "product" is training, then that's not exactly correct.
Anyplace that does a sufficient volume to always have a class running can easily roll a small percentage of students into the next class for additional training for no (measurable) additional cost.
Almost can be thought of as true,but, lets say a facility limits a class size to 8 ..I have 8 paying customers in a new class and a failed student. I cannot expect the LDS/instructor to put off a paying customer to put a failed non paying student in his/her place.
Some pools charge the rental fee based on how many are in the class,in that case failed student must pay. Some instructors get paid on a per student basis - per class, again that failed student must pay so the instructor can be paid.
Many independent instructors pay for pool time and rental gear for the pool on a per per student basis,here the failed student should pay to participate.
I have worked with students that were struggling and who really wanted to succeed on a 1 to 1 basis for 1 session(1-2 hours) to get them up to speed. I do not do it for free.The LDS pays me for my time on a hourly basis. The student usually does not , unless it is in the form of a tip as a expression of thanks. Anymore time than that there is a charge either for private instruction or for another ow course. Sometimes you just have to tell the person diving is not for them.
After teaching for 40years and thousands of students, I find that the student that fails usually is not taking the class for themselves, but for what some one else wants them to do (a reluctant wife/girlfriend taking the class for husband/boyfriend). Very often that same person does not follow instructors advise on gear selection-using old ill fitting gear that is loaned to them from husband/boyfriend/relative. Or a person who has very poor swim abilities and thinks that diving will cure them of their fear of the water. Ninety nine percent of the time there always is an underlying reason why someone, an adult, would fail a ow course that is so simple a 10 year old can do easily.