Also, there is no standard "hobbs meter".
Some of these hour meters run on oil pressure and count time all the time the engine is running.
Some of these hour meters run on oil pressure and count time all the time the oil pressure is above a certain level.
Some of these hour meters run on aircraft power and count time all the time the Master switch is ON (the renters sometimes fly with the Master off; no radio etc but it cheats the owner allright).
Some of these hour meters run on aircraft power and count time all the time the engine RPM is above a certain value (mine work that way; counts precise hours when above 1200rpm).
Some of these hour meters run on engine revs and count time based on the engine running at 2300rpm or whatever.
Any other offers?
The school has to decide how much to charge to get the total cost recovery they are after, and accept that some people will find ways to cheat the system.
A lot of schools (ALL where I've been based) charge for brakes off to brakes on, which causes all kinds of bizzare behaviour.
The fair way is to charge for airborne time only (aircraft maintenance is anyway based on this) and charge for fuel separately (i.e. rent DRY) but this has problems too (e.g. the renter can tamper with the fuel recording system) unless the plane is always returned with the tanks full (which can be highly inconvenient).