Interesting thread.
As a Brit who owns a flight school in the US that is authorised to issue I20 forms for the M1 it always astounds me at how many immigration experts flood this site with spurious information.
The answer is really straightforward PM me and I will give you the answer.
The INS take is the student must be 'legally' in the US.
What is legally in the US for the purposes of flight training, what is a given is the TSA clearance and that IS NOT the FTO's resposibility it is the responsibility of the instructor providing the training to verify his or her student doesnt present a threat to US National Security.
the TSA clearance is very straightforward and to date we have NEVER had a student be deemed as a threat!