when you say 'student', you mean low-paid, right? Last I looked, it was illegal to have unpaid interns working on anything your company might actually use to generate income.
Most of the major companies (MS, GOOG, etc) pay in excess of $30/hr (some as high as $40/hr) for interns. This is way, way beyond the high end of campus jobs.
- most of this pool of students you do not want to tap into. They're the ones who will do more harm than good, assuming they were even interested in doing any work. My impression from my time in college was that the majority of my colleagues were utterly incompetent and had no real desire to become competent. There's no hope for these people, and IMHO they make up the bulk of the "there are no jobs out there!" crowd upon graduation. These are the guys who do the bare minimum on assignments and have never written a line of code that wasn't required by a class, and get indignant when their framed piece of paper doesn't automatically deliver big paychecks on a silver platter.
- the rest are worthwhile talent, but competition amongst employers for many of them is fierce. I have a friend right now who has extremely high-paying offers from just about every big software shop out there, as a soon-to-graduate undergrad. In recent years I've seen MS (and some other companies) poach interns from other tech companies at the interview stage. Pay levels are quite high, approaching full-time levels in some places.
As a cost-conscious startup, you have to work hard to find the people that the Big Boys have overlooked. Recruitment processes is an extremely imprecise science, and from experience I've seen a lot of qualified people unfairly rejected because of dumb things like not having the right keywords in a resume to pass the inbound filter, or edged out because they froze up on a single interview question. There are quite a few of these guys out there, but the problem is that because many do not know how to market themselves, it's hard to distinguish them from the incompetent, worthless demographic.
- Get a bunch of well-respected people together
- Create something exciting
- Use your connections to find people that you know are good
These guys were taking advantage of the fact that MIT in particular gives the month of January to students to work on their own stuff. MS, GOOG, etc wouldn't go through the HR headache and give high pay to an intern if he/she was only going to be around for a month.
And keep in mind that if you offer that much for a CS intern, you'll have serious competition on your hands. Yes, you'll likely get excellent students, but you'll need to hire a small army of people to weed them out effectively if you want "the best".
I and a lot of people I know are/were working (not as interns) alongside school and many internships at the university are payed.
The pay might not be as high as what you'd get after you graduate but it's definitively better than most working class jobs that do not require any formal education.
The grandfather-post's observation applies more to liberal arts students (Geistes- und Sozialwissenschaften). With a math degree in Germany I never had a problem getting a paid internship during my studies. Some of my friends in the liberal arts, however, have to do unpaid interships even after finishing their studies.
Of course the media perception is dominated by liberal arts guys, because they are the ones who complain loudly and in a matter sympathetic to journalists. (While the more technical minded people are too busy making money and enjoying themselves.) Hence the "Generation Praktikum".
[1] my sister is in that boat right now - she can find paid unskilled work or unpaid design work; she's in Berlin, though
http://blogmaverick.com/2009/09/05/want-an-unpaid-internship...
http://www.onedayoneinternship.com/blog/are-unpaid-internshi...
I figured that if you were getting paid nothing while working on something profitable for a company, it was assumed you were being compensated with experience. But apparently, all the company can do is train you while deriving zero benefit from your training. This seems like a stupid law.