It's also brand awareness and marketing. Said student goes back to their university and starts spreading the word on campus about "how awesome my summer was wor

It's also brand awareness and marketing. Said student goes back to their university and starts spreading the word on campus about "how awesome my summer was working for X!" and how many "interesting" problems they got to solve. Many places will set aside specific, "interesting" side projects solely for the interns (while the rest of us engineers wish we could work on these projects, but are busy with the mundane tasks of keeping the lights on, which I imagine if you gave an intern this task they wouldn't be so thrilled to go spread the word when they go back, so yeah there's definitely marketing involved.)