This just in: NASA will partner with the Lunar Lion team as a part of Penn State’s first Space Act Agreement (SAA) with the space agency.

Haven’t heard of the Lunar Lion? It’s a team of Penn State faculty, researchers, and students who are racing against 21 other teams to put a rover on the moon by 2015 for a shot at $40 million in prizes through the Google Lunar X Prize (GLXP) competition. This agreement with NASA puts the Lunar Lion one big step closer to landing on the moon before the rest of the GLXP teams.

As a part of the SAA, NASA will give Penn State and the Lunar Lion a “pencil” thruster, which will be used by the Lunar Lion rover to “hop” from one spot on the moon to another. Penn State, in turn, will provide NASA with both research data and new propulsion engine concepts.

The SAA, which will last the duration of the project, also formalizes the relationship between NASA and the Lunar Lion team. The Lunar Lion will no longer be consulting NASA in an informal matter — it will now have access to the agency’s expertise and technicians as a part of a legal contract.

SAAs are typically signed between NASA and private organizations such as SpaceX, so as a university, Penn State is breaking significant ground by collaborating with the space agency in this manner. For one, establishing this first SAA with NASA paves the way for future agreements between the university and the agency.

This partnership between NASA and Penn State may also establish a new, university-centric model for space exploration. A university like Penn State would offer significant advantages over the NASA “old space” model of government-funded exploration and even the privately funded “new space” model led by companies such as SpaceX and Virgin Galactic.

For instance, NASA — if operating as a solely government-funded venture — is disadvantaged because of its high costs. On the other hand, private companies such as SpaceX and Virgin Galactic are disadvantaged because they don’t possess NASA’s expertise.

Penn State averts both disadvantages. The university can provide a large amount of resources at a lower cost than NASA — that is to say, students command a lower wage than industry professionals — while professors and researchers across various disciplines would provide the necessary expertise that a startup company like SpaceX would have to hire out of disparate research fields.

A university-centric model for space exploration presents significant benefits to Penn State, as well. For one, Penn State stands to receive future contracts from NASA. In addition, students would have access to an unprecedented range of hands-on experiences involved with running a space program.

Penn State students are already thriving in the Lunar Lion project — and even more so now that the team is actively collaborating with NASA as a part of the SAA.

“I think that the SAA is great for the program because it allows [the students] to work with actual NASA software and hardware — which is awesome on its own — and we might even use that on our actual spacecraft to the Moon,” says Philip Chow, an undergraduate in Aerospace Engineering who serves as the Vice President for Procurement for the Lunar Lion.

This is an exciting time for the Lunar Lion and Penn State, for sure. Stay tuned for Onward State’s updates on the team’s progress.

For more on the Lunar Lion, check out our interview with Lunar Lion team leader Michael Paul.