This is great question and has many answers. Cynics say that testing is just a means for instructors to make more money in fees and by selling belts. It should be a way to gauge student progress. Others say it showcases talents, and shows student progress for parents.
Student progress can always be measured during classes, but the test is a different environment with focused scrutiny on one student’s performance. The ability to perform alone is very important in the event a student may need to execute self-defense techniques in a real-life situation. A test may seem stressful, but that is an important experience for all students to have, a step that increases their sense of accomplishment and their confidence in their techniques. It is important to direct stress, where the body creates and releases a great amount of energy, into greater focus and concentration. Under these circumstances, executing the pattern of a kata or a defensive technique. We have had two recent black belt tests where despite physical exhaustion and the stress of the test, the students performed far better than they usually did in class. Testing brings the best out of our students, it seems.
Every test allows us to gauge progress and showcase those increased abilities and knowledge to parents. They need to be assured that their sacrifice of time and their investment in classes are worthwhile.
Fees cover various expenses of the tests, but those are actually small in relation to their actual costs, and the volunteered time of advance students in the dojo, and our occasional visitors from other dojos, who evaluate our testing students.
Students, nor parents, should ask when they are going to test. Instead, students should consistently demonstrate their skills and abilities in class.
Trust me, Sensei is watching. Other black belts are watching too. Sensei and the other black belt instructors use class time to determine when students are ready for a test. Demonstrated skills and abilities in class should be the determining factor. It’s always obvious who is practicing at home and who is using their class time most effectively.
I have seen students be promoted all the way to Shodan even though they did not test well. Consistently performing at a high level in class helped the instructors to justify the promotions. Belt tests are very important. Consistently working hard in class is even more so.