Almost everyone makes resolutions for the new year, from losing weight to gaining wealth. For myself, a college student, I've resolved to get serious in 2011 about building my financial acumen, and I'll track that process every few weeks for Money College.
I start with my decision to take an unpaid internship. As I finish out my junior year at Loyola University, Chicago, I bid farewell to the paychecks of past semesters and seize the opportunity to get out of the classroom and get involved with an organization that taps my passions. At the same time, I hope to make professional connections, apply the theories I have studied and start building my career.
This decision comes with a financial toll, but I'm seeing it as an opportunity to create value beyond a paycheck.It will be important to go into the experience with clarity and assertiveness about what I want to gain, in order to ensure a strong return on this investment of my time.
My internship is for six hours of credit through the International Studies program at Loyola University. Many employers will not accept interns unless they are receiving college credit. This practice is criticized because it not only has students working for free, but also paying tuition just to be there.
Justification for the practice can be found in some ambiguous wording of the Fair Labor Standards Act. One of the six criteria that it says must be met for an unpaid internship to be legal is that the "experience is for the benefit of the intern." By requiring college credit, the employer ensures that the intern has quantifiable benefit from the job.
There are other benefits that come from doing an internship within the university setting. My university employer and I must both sign a learning objectives contract that will ensure that I am doing more than menial office tasks. This brings an element of accountability that would be missing if I were going it alone.
Reports from USA Today and The New York Times suggest that the number of unpaid internships (both in and out of the college-credit setting) is "mushrooming." The 2010 Internship and Co-Op Survey by the National Association of Colleges and Employers found that 86.5% of respondents have formal internship programs. The Department of Labor and the Bureau of Labor Statistics do not keep track of how many are paid or unpaid. I've found very few listings for paid internships.
Six credit hours would cost $3,930 at Loyola University. If I were to work a part-time job over the same 17-week period as my internship, I would earn around $3,000.
I've come to see the internship as an investment, like college itself, which will pay off much more than this relatively small sum of money. I also took out a few extra loans to carry me through this period (and which will help me build much-needed credit history, too).
There's a prevailing idea that any time we offer up our services, we should be compensated with money. My optimistic take is that my internship is an opportunity to form relationships with people who are successful in their field; to see the inner workings of an organization; and to acquire the self confidence that comes from successfully meeting real-life challenges.
I'll let you know how that goes.
Finding the Value in Unpaid Internships