Clare, I did all of my flight training the 'old way' but it's probably taken a good 7 or 8 years (calendar, not full time). Would I personally do it the FEE-HELP way? Probably not, but that's just me. Some people want access to a quicker way of doing it, their choice.
As far as the 'attitudes' go, 100% honest, yes it is tough to get through to some of them. But if you don't paint a bull**** picture in the first place it makes the job a little easier. Not all FEE-HELP schools are sausage factories.
A full time, integrated school without FEE-HELP can compete, the good ones do, I know one of them at Moorabbin that I'm mates with, they're in a different market to us but they're surviving. We'd all like to do a little better of course!
Where did all the money go? I'll put any of our courses up for audit to any bonafide aviation person on here. I can tell you exactly where the money has gone: Aircraft refurbishments, building renovations, 2 part time maintenance people, 2 additional full time instructors, 2 additional part time instructors (advertising for more).
As far as the failures go, I reckon you and I could pick the ones that are going to go down, all you had to do was look at the management structure, too many chiefs with too many fancy titles. Personally, any government or education department official is welcome to audit our organisation.