At FSI it is at least partly due to mismanagement.
A big selling point in the program is that you can work there after you get your CFI. They keep hiring so they can tell people that the CFI hiring program is still open.
The same thing happened post-9-11. They kept hiring IPs long after student starts dropped off. A few IPs got hired over the summer and they immediately started doing stan classes again.
They need to determine how many CFIs they actually need based on the student population rather than hiring willy-nilly to help the marketing department.
It wouldn't be so bad if there were some sort of guaranteed salary, but FSI IPs get paid only when they work (except for a select few). You don't fly, you don't eat. And by that point, you also have a monstrous student loan to pay back.
What the management is doing is really not fair. They make you sign an 800 hour contract and then make it practically impossible to fulfill it. If you leave early, you add to your loan payments.
I, and a few other IPs, really thought that FSI needed an IP union, but no one wanted to risk upsetting management and losing what little income we did have. Rumor had it that an attempt was made to organize a union at one time and the instigators were fired.
At this time, I would have to say that it is not a good idea to work at FSI. It is still a good school to earn the CFI license, but you would be better off to work somewhere else until they get things together.