When I was a young man (18 or 19 years of age), I began attending a local school because it was the only game in town at the time my previous teacher stopped teaching. Shortly thereafter, I began training with my sifu, but since he lived 120 miles away, we agreed that I would learn material with him, but stay enrolled in this other school for consistent training, mainly for exercise and stretching.
Having already been a black belt in a different system, it wasn't long before I was courted by this school (which was run like a corporate franchise) to be an assistant instructor. This also meant that I would have to attend their "instructor's college" in a nearby city as well. So, in essence, while I was still technically "learning" there, I was:
1) paying my regular tuition,
2) teaching group classes for free, and
3) paying for instructor's college.
It only took me two months (two months too long!) to realize this place was bilking me for money in three different ways. Luckily, a new school opened shortly thereafter that more closely resembled what my sifu taught and was a much better fit all around.
So, in this true anecdotal story, you can see there are many ways schools can generate revenue without even having to teach. I'm glad I learned that lesson relatively quickly, and regret that I didn't learn it more quickly than I did.