One of my recent campiagn items was introducing an arcane college - one which offers classes and magisters who can offer training and insight. Obviously, there is a huge amont of backstory and plot that can be crammed into an overview of a class/professor's coursework.
However, from a mechanics standpoint, I've come up with a neat way to get some mileage out of knowledge skills. Classes have exams, which are a small battery of knowledge (representing memory) and spellcraft (representing applications) skills. Classes, which are how universities make thier monies, cost xxgp/class, after registration fee is paid. Each class has a Knowledge(Arcane) DC. If you make the class DC, you get a credit, a +2 Knowledge bonus (which stack with themselves) which can be applied to any roll on the exam. Exams are 3-5 Knowledge/Spellcraft checks, which can be taken at any point after the student has taken at least two classes. Failure can have whatever penalties you decide. Success indicates completion of the exam. Courses are several exams apiece.
Courses can provide flavor spells, feats, skill bonuses, languages, and/or trainer/training opportunities or discounts on future training.
It struck me as a neat mechanic, and not one I've read elsewhere. Thought I'd share.