It is not. It's virtually impossible to hire an intern without paying them -- the company would have to show that the intern learned a skill, and that the company saw no benefit, at all.

If it is unpaid for the student, and the end “customer” is a for-profit business, even if it is characterized as part of a course of study, it seems very likely illegal, though the program seems to be structured in a way intended to provide an argument (though IMO a rather superficial, pretextual one) that it does not require payment under the applicable federal rules [0].

[0] https://www.dol.gov/agencies/whd/fact-sheets/71-flsa-interns...

If it isn't it should be.