Their benefit. I work at a public university and the interns are ineligible after their separation from the university. I'm not sure why any of this matters anyway, because they are getting paid to work for me and are gaining valuable experience working on things that are much larger than what they would be doing in class.
Not quite sure what you're getting at here. This is no different than a paid internship at Microsoft or Google, or many other companies in the midwest, just on a smaller scale.
I think the confusion was that others assumed you meant an unpaid internship. I'm not sure why. In our field, I assume an internship is paid unless explicitly told otherwise.
What he may be getting at is that your description of intern duties implies a violation of the US Federal labor law prohibition against interns doing work that provides immediate benefit to the company/institution.
"Interns in the “for-profit” private sector who qualify as employees rather than trainees typically must be paid at least the minimum wage and overtime compensation for hours worked over forty in a workweek"
Not quite sure what you're getting at here. This is no different than a paid internship at Microsoft or Google, or many other companies in the midwest, just on a smaller scale.