Love the idea. Education is a gigantic set of institutions that could be made much more efficient with free-market models; and what better entrepreneurship model than Y-Combinator?

As with the whole hacking-education movement, it's an interesting intersection of forward thinking educators and social change organizations, as well as business and technology experts (hopefully) seasoned with lots of startup experience.

Our startup - http://betterlesson.org is an early entry into a growing movement.