Many companies have the opposite problem where they go under because customers have not paid them so why does aviation have these problems ? Is it just very tempting to raid a cash pile to prop things up in the hope that they will get better.
I believe you will find that the fee up front ploy is used to get a big injection of lucre into the coffers to pay for the costs that weren't paid maybe a year before. This is why this type of company, I am sure, would disregard the escrow option. They aren't after guarantees - they are after the cash here, now, fuel bills to pay etc.
It is usually caused by needing to undercut the opposition to get the business; eventually you undercut so much that your margin is nil. Then the directors raid the assets, declare the entity bankrupt and start the same company the next day with no liabilities and a massive startup bung from the Westminster idiots.
Cheap can be expensive - we (the prospective clients) are responsible for this. Chances are you will be OK, but someone always ends up at the end point broke. Look at any Ponzi scheme and you will see the similarities.
I'm in the wrong game...
It would be better to take the opportunity to cut numbers down to say a maximum of two Intergrated providers and a sustainable maximum for Modular, so long as schools agree to adhere to an agreed Scheme of Charges in return and student funds are placed in an escrow account managed by the CAA.
You'd think so; I refer, of course to my post in this thread:
http://www.pprune.org/6787712-post10.html