Taken verbatim from one of the members of the Shad Astula RP guild in TESO. I’m fighting a fever right now, so I just took the chatlog of our back and forth in a PM. This was to do with a motion made during one of the online meetings, over the possibility of tweaking Meralag into either Shad Astula or a town that grew up around a defunct Shad Astula. I asked opaj here to give us some more lore on Shad Astula and how it might apply to the 3rd Era.
opaj:
Hello there! Personally I would be thrilled to see Shad Astula in the 3rd Era, so I'm glad you're asking my thoughts.
I'll fill you in on how a TES III Shad Astula would likely appear, assuming that no major cataclysm changes the course of the academy's history. First, the things hewing close to lore that I think are fairly uncontentious.
Shad Astula is an academy dedicated to training the future of Morrowind's elite. Outlanders might mistake it as a simple magic school or a military academy, but the truth is that Shad Astula trains its students in all disciplines necessary for leadership, whether it's military, diplomatic, or simple matters of protocol. The main focus is magic, of course, but the graduates of the academy are expected to be more than just mages -- they will become house grandmasters, great generals, and the leaders in their fields.
Shad Astula is better than the Mages Guild (according to them). In fact, Shad Astula developed the modern concept of the schools of magic, which the Mages Guild went on to adapt and corrupt with their backwards Western thinking. Personally, I would wager that they still teach all 7 of the original schools of magic there, including Thaumaturgy, but that is just a theory. (For more on this, see Gabrielle Benele's well-meaning but ultimately ill-informed Proposal: Schools of Magic.)
There are two ways to gain admittance to Shad Astula: to be recognized for your skill and invited, or to give a very large donation to the institution. This does dilute the claim that Shad Astula is "just for the best," but given the nature of wealth distribution, they can probably keep the average aptitude of their student body high simply by being very picky in who they invite.
It is a place of learning, but it is also a place of great danger. The vaults of Shad Astula hold many arcane secrets and relics, and, of those, more than a few are capable of unleashing terrible destruction. During the Shad Astula questline in ESO, one of these relics falls into the wrong hand, and the vast majority of the student body are turned into thralls of the enemy as a result. It is extremely unlikely that this was the only such relic.
Now, here are some conclusions we've drawn about how things probably work, based on the sparse information we do have.
Shad Astula is only for the Dunmer. The Ebonheart Pact existed for 10 years before they finally allowed non-Dunmer Pact citizens to join, so it seems safe to say that they returned to their old ways once the Pact collapsed. If you wanted to construct an actual questline about joining Shad Astula, I'm sure this could be lifted with the right reasons, but it seems to me that the Great Houses would want to keep this particular academy for their own people. The n'wah can go to the Mages Guild.
Shad Astula is supported financially by the Temple and the Great Houses. While there is a tuition to enter, in ESO you meet several students who came from very humble backgrounds (including a Nord whose family didn't even want her to attend, which begs the question -- how is she paying for it?). It seems unlikely that a meager tuition alone would be enough to keep the doors open. I view Shad Astula as a public effort to preserve and protect Dunmeri magecraft. This makes it susceptible to the whims of political intrigue (perhaps a hook for a quest there?), and I imagine that the administration often must bend over backwards to appease their benefactors.
If you're seeking to learn magic in Morrowind, I imagine that Shad Astula is second only to apprenticeship to a Telvanni master -- and with half the mortality rate, at that. Because Shad Astula has the ability to be picky about who they allow admittance and is able to enforce a more regimented curriculum, they are able to produce, on average, higher quality mages. Of course, the gap was probably much wider in the early 2nd Era, before the Mages Guild stole their superior schools of magic-based teaching style.
The curriculum is organized into tracks, of which students can choose one or more. The 2nd era curriculum mentions several introductory courses (though Mysticism and Thaumaturgy are missing -- clearly those courses are too advanced for brand new students -_- ), of which students are urged to take one before branching out if they so choose. I would extend this practice to all of the courses taught at the academy -- not quite a major, but certainly a form of specialization.
Okay, and now some things that we've done for Shad Astula RP guild, but that may not be especially relevant to your work.
Shad Astula boasts its own guard. This is particularly in response to the events of ESO -- after the academy was nearly lost to the Maulborn, they felt steps had to be taken to secure their own campus. Note that, with the introduction of the Justice system, Ordinator guard NPCs were also added, so that's another option for on-campus security.
Shad Astula hosts semi-regular open lectures. This is purely to open ourselves up to the rest of the RP community, and ESO is a weird time for Shad Astula, so it may not be a thing in the 3rd Era, but it could be a quest hook or even just a neat little bit of environmental world building.
Shad Astula also provides grants for research projects (using money donated by the Temple and/or Great Houses, of course).
And let's not forget about excursions to various ruins and such throughout Morrowind (and beyond, when possible). These aren't full-on excavation projects, but rather an opportunity for hands-on teaching.
I'm sure I could tell you much more, so please let me know if you have any more specific questions. In particular, I feel like I haven't really created a sense of what campus life is like in this post. But, at the moment, I'm battling an over-aggressive work schedule and a spot of food poisoning, so I shall leave it at this and address any questions you might have when I'm feeling fresher.
(me):
Would you mind terribly if I took this verbatim to show to the other devs? You did very well at explaining it.
I don't think we'd be able to turn it into a faction outright, but I like your explanation for that, that it'd be Dunmer only. Because it's in Indoril territory (with Indoril architecture), we've also discussed whether it'd have a more theological bent.
The only thing I wonder about is if it's true they invented the schools of magic. That sounds like something the Dunmer would claim, but be unable to back up, seeing as how magic has been around long before the Dunmer existed as a people. But perhaps that is due to Sotha Sil...hmm.
Anyhow, thank you so much for giving me your thoughts! I hope you feel better soon. I'll read over it and ponder it a little more--it's pretty late where I am right now.
opaj:
Because I have the common sense of a bantam guar, I'm still up in spite of my food poisoning. 
Feel free to share this verbatim.
Shad Astula as portrayed in ESO does not have a theological bent, though it does take place during a time when they have to make a show of being accepting towards Kyne-worshiping barbarians and Hist-mad shellbacks. Our current master-wizard (we don't RP the archmage, since he's an NPC) happens to be Telvanni, so under her leadership we pay lip service to the Temple but little more. Just in case that is of any interest to you.
As for whether or not Shad Astula invented the schools of magic, they almost certainly didn't. The key to this lies in the spellcrafting system. While this system was indefinitely postponed, we did get a little preview of it, and that preview revealed that the "ancients" (a somewhat off putting term for the Ayleids, though in this case it may refer to both Ayleid and Aldmer) actually devised their own schools of magic that was forgotten by the mid-2nd Era. Schools of magic that, if the datamining is to be believed, quite rudely excluded Mysticism and Thaumaturgy. Of course, none of this ever made it into the game, and by the time it does (if it ever does), this hinted-at lore could be rewritten entirely.
That's why I say that Shad Astula created the modern concept of the schools of magic. Whether the academy came up with these classifications on their own or if they were cribbing off of some lost lore the rest of the world had forgotten, I can't say, but it's plainly stated in in-universe documentation that the schools adopted by the Mages Guild were taken directly from Shad Astula's curriculum.
2015-09-28 20:13
2 years 8 months ago
I’ve been incredibly relucant to reply to this, because I’m almost entirely negative about the topics of post-Oblivion lore, but since nobody else has I might as well, hoping that we can create a synthesis…
I don’t think Shad Astula as per this interview works in TR’s context. The political context demands a recognizably unified state which as per TR’s reading of history, plain simply didn’t exist prior to Tiber Septim’s conquest. You can just not mention this and wink wink nudge, but I think this will create too much emotional baggage when we don’t adher to all the little things ESO retconned into the second Era. Like Bantam Guars, for example.
One of the bigger issues I have with ESO is that Zenimax has the strange desire to heap piles of dung on top of Vanus Galerion every chance they get. So the whole “Shad Astula developed the schools of magicka” is just plain dumb and I agree on that we just shouldn’t mention it.
Another one is the increased level of compression, so every location has to be special.
In truth, even Morrowind’s compression will make Shad Astula a lot less important than it appears in ESO. When I pointed at Meralag as a way to retcon it in, I was thinking of keeping the name Meralag, adding/retaining some Indoril tower buildings to a Velothi city, have them filled with a library and then have the locals refer to ages past when this town was really important y’know.
That aside, a Telvanni Archmagister is also really really strange, since the Telvanni were so opposed to the Ebonheart Pact that they politically split from Morrowind. Even the issue of suddenly reenslaving your erstwhile allies, the specter of Morrowind’s reunification with an entire wayward house has ever been voiced. Especially since that must have taken place after Dagoth Ur awoke. It’s not something that would have passed quietly into history by Morrowind’s era.
2016-01-19 19:35
2 months 4 days ago
The direction ESO took with the Pact is so counter to how Morrowind was portrayed in the 3rd Era it’s hard to know what to do with it. It’s very SJW, for lack of a better term, and how to write that all falling apart and crushing a bunch of dreams AND mores along the way is troublesome.
I think there’s two ways we could go with it. One is like Atrayonis says, almost more of an Easter Egg, with records of an older school grounds being present in the town of Meralag. Maybe a nice little ruin-dungeon under the town with all sorts of magical traps, tricks, and goodies strewn about it.
The other is that the school has gone through some big changes since that period. That would the route you might be able to rename/remake Meralag into a Shad Astula. (Actually, I would like to keep the magical dungeon even in this version, because it sounds fun to make.)
We have to look at what might be logical historically. The Pact does it thing, but eventually Tiber Septim comes into the picture (and since there’s no mentions of the Pact in his lore, I’m going with the theory they dissolved by then), fights Morrowind to a standstill, then the Tribunal come out and make them a part of the Empire. Half of Indoril kills themselves.
Slowly Indoril starts to recoup its losses, but they’re a shadow of their former selves. They jealously guard their position of being the Tribunal’s most fervent followers, the aristocracy, and try to tighten their grip through politics while wasting their minds away with melancholic velk nectar trips.
Shad Astula is a college of thought, practicality, and forward-thinking magic. Things that don’t necessarily jive with the new Indoril. The Indoril wouldn’t be the sort to overtly make war on them, more tweak a tax there, reduce a tuition here, demand a certain teacher teach classes that are to their liking.
As everything else in Morrowind is fracturing, so is the Great Houses unity. The other Houses pull out of Shad Astula, the school has no more financial backers. They must either do it the way the Indoril say (to whom they owe much of their rent), or ship out.
And certainly their brightest minds do ship out. The school diminishes to a few caretakers, some perhaps more senile than wise now, a few hard-line Tribunal preachers, maybe one or two young aspirants hoping the rumors are false and a name still can be made for themselves at the hallowed old Shad Astula.
^ That’s the direction I would propose for it at any rate.
2016-05-09 13:13
13 hours 39 min ago
I am for, having a more localized magic college/university, like the The college of Winterhold and the Arcane University, as a (supplementary) questline for magic focused player characters, instead of always teaming up with the mages guild.
I think atleast one college or/and university for magic; per province, would be a great addition overall, as it would be more focused on actual study, than the fetching quests in the mages guild.
However I agree with Atrayonis that Shad Astula is really divergent lorewise, and not to mention that we would be adopting a place in ESO, which would bring all kinds of expections from ESO players, which we can't cater.