Why Students Shouldn't Take Unpaid Internships

Illustration by Jason Arias and Erin Perfect

The cost of college is going up—again—but not in the way you think. Sure, tuition at both public and private colleges and universities is hitting record levels across the country. But then there's the matter of paid internships. Not the ones that pay you—the ones that, one way or another, you end up paying for yourself.

Here's the deal. Employers like to see internships on the résumé. Three quarters of those surveyed by the Association of American Colleges and Universities said they want students to obtain real-world know-how "through internships and other hands-on experiences." Colleges and universities are listening. According to research firm InternBridge.com, 60 percent of students say internships are now mandatory for graduation at their schools. The result: more than half the class of 2011 had at least one internship, according to the National Association of Colleges and Employers.

The high demand for internships in this gloomy economy ends up translating into lots of free labor for companies. Nearly half the 2011 grads were not paid for their work. At not-for-profits, that's OK (at least in the eyes of the law). But when it comes to for-profit companies, it's an issue. The Department of Labor has six conditions that must be met for unpaid internships at for-profit companies to be legal. The internship has to benefit the intern (not the company), for one thing. The intern can't displace a regular employee, for another. The biggie, however, is that the internship must be "similar to training ... given in an educational environment." That's been interpreted to mean unpaid internships at for-profit companies are legit as long as students receive academic credit.

But to get those credits, in more than 70 percent of cases, according to InternBridge, you'll generally have to pay your university for them—often substantially. At Georgetown University, the cost per credit hour is $1,705. At William & Mary, it's $286 for in-state students, $985 for out-of-staters. Considering that a single course is usually three or four credit hours, that's a hefty chunk of change to work for free. And that doesn't count the cost of finding housing and transportation in the city where your internship is based. "If you have to contribute to your family's income, it's just not economical," says Ross Perlin, author of Intern Nation. "That's going to make it tougher to break into certain fields unless you get really lucky."

And if you can swing it financially, is it worth it? Not always. Unpaid internships don't do as much for you in the job market as paid ones do. According to the 2011 Student Survey by the National Association of Colleges and Employers, paid interns spent more of their time on professional duties, while unpaid interns were given clerical ones. Sixty-one percent of paid interns working at for-profit companies received a job offer; only 38 percent of unpaid interns working at for-profit companies did. And paid interns netted higher starting salaries. "The unpaid internship offers no advantage to the job-seeking student," NACE concludes.

Of course, that's when you look at the aggregate. If you've landed an unpaid internship you're convinced is worth it, there are ways to maneuver the system to bring down the cost. First, try to get out of paying for credit at all, says Lauren Berger, creator of InternQueen.com. "Speak to your school's career counselor, because sometimes the career center can write a letter saying the student is [eligible for] credit, and that will satisfy the formal HR policy," Berger says. Second, ask if there are stipends available to cover unpaid internships. This has become such an issue that a number of schools are raising funds specifically for this purpose. If both of those are a no-go, then seek credit from a cheaper school. Employers won't care. And at your local community college, credit hours may be as little as $101 an hour. The Credit to Careers Program at UMass Amherst offers credit hours for $190 each—a steal, says program director Jeff Silver. Students from any four-year college can apply to the program and receive the $190 rate. Finally, don't work full time. Whether you work three days a week or five, you can still put it on your résumé, and in the meantime you can pick up a second job that does pay.

University of Pittsburgh grad Jillian Skrocki had her doubts. "I'll never forget my grandfather telling me to never take any job or internship that was unpaid. He said, 'You're worth more than that.'" Nonetheless, she took several unpaid internships before graduating last May. And, now employed full time with an insurance company, she isn't sorry. "Internships are indispensable," she says. "If you don't have lots of things on your résumé, then it will be trashed."

With Maggie McGrath