A CanSat is a simulation of a real satellite, integrated within the volume and shape of a soft drink can. The challenge for the students is to fit all the major subsystems found in a satellite, such as power, sensors and a communication system, into this minimal volume. The CanSat is then launched to an altitude of a few hundred metres by a rocket or dropped from a platform or captive balloon and its mission begins: to carry out a scientific experiment and achieve.
A CanSat project is much more accessible and much less expensive than a CubeSat. And a very good first project for schools contemplating a cubesat project.
Sonoma State University (CA, US) developed two projects that are very similar to CanSats. Rising Data is flight recorder that fits into an inexpensive hobby rocket, the Estes Big Daddy, that can reach an altitude of 1000+ ft. Their Small Satellites for Secondary Students (S4) is more similar to CanSats and are appropriate for larger rockets reaching to higher altitudes.
For more information about CanSat competitions, check out:
American Astronautical Society: http://www.cansatcompetition.com/
European Space Agency: https://www.esa.int/Education/CanSat/What_is_a_CanSat
Wikipedia Entry (contains links to numerous other competitions): https://en.wikipedia.org/wiki/CanSat