What Lambda is doing is more like pooling of risk used in insurance: if you (as an investor) bet on ISA of a single student, you have a high-risk, binary outcome (loose all your money or get some reward).

If you bet on 1000 students as a group, you significantly de-risk the whole thing while only reducing potential reward a little bit.

Risk is surely part of it, but I think cash flow is a big issue as well. Very hard to run a business where you provide a service now and get paid over a couple years starting ~6 months from now. Better the split the company into the entity that provides the service and another that provides the financing.