This project has been created with good intentions and I hope people get some good out of it. I'm not going to slam this well-meant project, but being modelled on the Google Summer of Code, I have some reservations. The GSOC FAQ states some primary "goals" of the program:

CREATE AND RELEASE OPEN SOURCE CODE FOR THE BENEFIT OF ALL

Paying people to be motivated to bother to work on open source code seems odd. If someone comes along with a "I really want to do X but I need $Y to live" request (as Gregory Brown did a couple years back - http://rubymendicant.wikidot.com/proposal) that's cool, because the request has come from an intrinsic motivation and you can choose to donate based on the utility of the work that will be done (and Greg did a great job on Prawn, by the way).

With a GSOC-like program, there's a pitching process by students who are being provided an extrinsic motivation of $5000. Yet, this extrinsic motivator does not realistically reflect the typical motivations for contributing to open source projects. The money provides an American Idol-esque motivation of "try this out to win fame/money" rather than encouraging those who are already trying hard.

INSPIRE YOUNG DEVELOPERS TO BEGIN PARTICIPATING IN OPEN SOURCE DEVELOPMENT

Is offering a (monetary) reward a good way to get someone with no experience to start doing something? Perhaps, but in something like open source, does it make sense to wave money at people who aren't already intrinsically attracted towards the cause? It feels like paying your kids to do housework to me.

Open source is tough enough to need serious intrinsic motivation from its participants (even if you're ultimately doing it for "fame" or to get a job). Are these new people going to stick around when there's no easy money? Looking at past GSOCs, many participants appear to be folks who were already contributing to open source development (if in a small way) but who happened to get lucky with a nice stipend to do something they were already motivated to do. That seems against the spirit of the program.

PROVIDE STUDENTS THE OPPORTUNITY TO DO WORK RELATED TO THEIR ACADEMIC PURSUITS DURING THE SUMMER (THINK "FLIP BITS, NOT BURGERS")

Limiting the program to the "young" and/or "students" also strikes me as odd. Google has this educationally elitist air about it at the best of times. Is the average software engineering student flipping burgers all summer nowadays? I suspect the people flipping burgers are those who made bad decisions at a younger age and are now stuck in that world.

Encouraging disadvantaged developers who aren't academically active through a program like GSOC would be awesome, because some real chances to turn people's lives around would appear rather than saving some university students from the real world. Help people who flip burgers for pocket money or help people who are stuck flipping burgers all year too?

GIVE STUDENTS MORE EXPOSURE TO REAL-WORLD SOFTWARE DEVELOPMENT SCENARIOS (E.G., DISTRIBUTED DEVELOPMENT, SOFTWARE LICENSING QUESTIONS, MAILING-LIST ETIQUETTE)

Again, they need to be paid to learn this stuff? If they're not familiar with these concepts and they're taking software engineering classes, we need a campaign to fix the syllabi.

All that said, I know the people behind this campaign and that they mean all the best, and I hope some students get some good value from it. Good luck.