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The university I went to had this. We had to maintain an application that was built by our seniors and then hand that off to the next batch.

I'm impressed by the closeness to reality, but curious how they could assess performance consistently?

"the students are getting worse every year"

This is a really good idea, but I would hate to have to do it... unless I was the senior who got to do the original greenfield development!

Worst of all: the first seniors get to refactor the professor’s code.