This paper contributes to pedagogical debates on how to meet the learning needs of young people who are disconnected from school. It presents a case study of a program which aimed to prepare students for their Year 10 equivalent school leaving qualification in a basic education section of a Technical and Further Education (TAFE) college in Australia. Most of the students were between 15 and 17 years of age, had experienced literacy and numeracy difficulties in formal learning, and for various reasons were disconnected from the school system. The paper explains how an approach to learning in VET led to important human and social capital outcomes, and in particular, a changed sense of efficacy on the part of students in the program. The two key elements of this VET pedagogy were: individualised, self-paced learning within a flexible program structure; and the fostering of social capital, including mutual trust and respect, through the course-related learning network of teachers and students and other influential networks, including peer networks. Analysis of interview transcript data with students and teachers revealed the mutually reinforcing role of these elements of VET pedagogy. (Contains 1 table.)