Sorry to point out the obvious.....
Regardless of whether it is a flying school or not, investing any substantial sum of money takes some prudence.
As a director of a company cashflow forecasting and money in the bank offer many more benefits other than "Interest Earned", for a start it gives visibility to the credit worthyness of a company which in turn allows a business' to obtain and fund finance.
Flying is affected by the seasonal variation in the weather. Paying up front for hours is a contract that a Bank will respect and identify as revenue. Effectively forcing for people to pay as and when they fly gives any business a problem that they can only provide finance instituations a forecast based upon the last years figures, as such only a percentage of the revenue forecast will be accepted because there are no guarantees (contracts).
As with all things in life there is a risk when paying up front, these risks can be mitigated to an extent by not investing more than your willing to lose and by doing your research in where your investing (Ask around, credit checks, speak to the finance dept etc). Looking for a club that earns its revenue not only from the flying e.g. maintenance and you will probably find a club with a more stable footing but the key is research.
Security comes at a cost, that cost is the higher fees you have to pay. You cannot have the best of both worlds by having cheaper fees when not providing a contract that can be substantiated for forecasting purposes - this works in all aspects of business not just aviation.