Instructors "MUST" not accept any student for courses or challenges. Instructors may choose to offer PAL courses, RPAL courses, challenges, not accept a particular student or any students for a period of time.
Except that it is not.
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Challenges are often priced to encourage people to take the course ($120 to challenge both exams or $195 to take the courses) as instructors generally prefer people to receive the benefit of the courses over the bare minimum of the exams.
There are people that prefer to do the minimum but $75 to receive a mandated of 12-18 hours of instruction (excludes breaks & tests) is generally an easy choice for people with an interest in firearms.
A lot of it is about attitude - people who feel they know everything they need to know in order to shoot their firearm of choice and consider the course the last step in the process are apt to challenge the exam. People who feel they have a lot to learn about firearms and consider the course as the first step in the process are apt to take the course. Taking the restricted course at the same time fits into that thinking - for the couple of dollars and couple of hours more why not learn about restricted firearms as well and obtain the license.
Same as MudChucker, and it may be self selection bias, the feedback I receive is that people are pleased to have taken the course - had fun and learned something.
For the course it makes logistic sense for students to write the exam first - time to setup the practical exam and as people finish writing / paper work at different time it works well with the timing of the practical exam.
Similarly find that the practical is the weak point - people may have shot their friends semi auto or bolt action but then when they work their way through the actions... not know how to work them, not check ammunition, not work the safety, not... and then make an appointment to take the next course or challenge the exam another time. Instructors often offer free retakes for people in the course but not for challenges...