Unpaid Internships: The future of education?

While I am writing this in the context of engineering education in Ontario, I'm sure you can see that with a little tweaking, it could apply far more broadly.

It's no secret. There's something of a crisis going on. Companies are complaining that they can't find people with the skills they need. Meanwhile, students are struggling under increasingly onerous piles of debt, working their butts off for grades that, honestly, won't matter two years into their first job, if that long. And when they do graduate, they face the standard conundrum: how to get experience, if you can't get hired without experience. To add to the misery, the new norm of short tenures at jobs makes formal training an unpalatable expense for companies.

Community colleges can't catch a break, because graduating from one is still looked down upon, relative to a pricey university degree. Some universities have responded by adding more project work, or joint programs with colleges or industry. Students are adding extra-curriculers, and summer or co-op positions to their resumes. All well and good, but it doesn't seem to be a fix, does it?

What if I told you there was another way? Maybe a happy alternative, which serves the industry's goals of getting workers skilled with the skills employers actually want, while giving young people a faster, better, and cheaper alternative to what they have now?

The roots of this better way already exist. The body that governs engineering in Ontario is the Professional Engineers Ontario, or the PEO. To get a P.Eng. designation, it is recognized that education is not enough. You need at least four years of professional experience, at least one working with an existing P.Eng. You also need to pass a standard exam.

My suggestion is to simply extend that idea, and get rid of the final requirement for a 4-year degree. Everyone knows that it's nearly guaranteed that you will learn more in a day of professional work than a week in a classroom. So let's get young people learning on the job.

Now, a few criteria:

1. Like most (all?) engineering programs, there would be prerequisite educational requirements for high school achievement.
2. The company 'hiring' the student would have to guarantee that the student is doing actual engineering work. No fetching coffee.
3. Related to criterion 2, there would be basic educational expectations each year. If the student does not pass a standardized test (possibly catered to the industry, and presumably developed with industry input), the company would face a penalty.
4. The program would extend for four years, at least two of them with the student managed by a P.Eng. The student could change companies mid-program, but each of four standardized tests would require a year at a specific company. As well, because companies derive less value, and put in more time and effort early on, the company a student would transfer to would have to pay a fee to the company they are transferring from.
5. At the end of four years, the student would be eligible to earn a P.Eng. with no further education requirements.
6. The kicker: the program would be unpaid. Not by the student, not by the company.

Sure, 'unpaid internship' has become something of a dirty phrase, but is it really worse than 'unpaid, and paying through the nose, education'? Sure, companies would be taking on some risk. At the beginning of the program, it would likely cost more, in productivity and mistakes, to train the student than the work they're getting out. And they face a penalty if the student fails their test each year. But, as time goes on, they would have the balance of four years of free work, and a future employee ready to step in, with a P.Eng., who they can be sure has the skills they need. Not only would students not be paying for their education, they would be learning real-world skills in real-world settings. If they do a good job, they will have an employer waiting for them, with open arms, at the end of four years. Because they can transfer mid-program, companies will be competing for student talent, with the transfer fee to encourage companies to embark on those risky first couple of years. PEO benefits as well, with a strong incentive for more people to earn their P.Eng.

Thoughts?