It’s hard to argue against the value of a good internship and how it can prepare a student for life after college.
A few weeks or months spent working in the real world can help build connections and confidence, further develop skills learned in class, and—perhaps most critically—bolster a new graduate’s chances of getting a job. An internship also can help students decide if they’ve chosen the right major and want to continue on the career path they’re on.
That may explain why many universities are pushing for more academic internships and are requiring them for an increasing number of degree programs. Not just for doctors, dentists, accountants, and teachers, but for those seeking careers in sports or hospitality management, communications, technology, and the arts.
Internship Stats
According to internship research conducted by Zippia, students who interned during college are 35% more likely to receive at least one job offer after graduation than those that didn’t intern. And a whopping 70% of interns receive a job offer from the company they interned at.
If there’s a specific company or industry you have your heart set on, interning can be a fantastic way to get your foot in the door and hopefully receive a job offer down the line.
The Cost of College Credit Internships
Close to 40% of all internships are unpaid. Which means that often, the students who take those internships are forgoing full-time, part-time, or seasonal employment to take an internship that doesn’t come with a paycheck.
Instead, that unpaid internship could add to their debt, especially if they have to relocate temporarily (maybe to a larger city or even overseas), buy a car, pay for gas or some other form of transportation, put together a work wardrobe, and pay for food.
Some students who take internships—paid or unpaid—can choose to or are obligated to enroll for course credit. Depending on how many credit hours their internship entails (the average is three but it could be more), they could end up paying hundreds of dollars in tuition.
Of the internships that are unpaid, most are in nonprofit or government sectors. Nearly all paid internship positions are with private and for-profit companies.
Advocacy groups are pushing for more paid internships, especially because low-income students often cannot afford to take on unpaid work, creating barriers to equal opportunity. To combat these barriers, the White House Internship Program started paying their interns for the first time in history in fall 2022.
Interns want to and are supposed to be doing relevant work, not making copies, fetching coffee, and running other errands that paid employees would be doing if the interns weren’t there.
How Much Do Paid Internships Pay?
Paid interns aren’t getting rich, but they are at least making minimum wage. For interns that are getting paid, the average hourly rate is $15.03, according to Zippia. Those wages help pay some expenses, but not all—making an internship an opportunity many students and their parents simply can’t afford or they must struggle to pay for.
If you’re thinking, “Well, that’s what student loans are for,” you’re technically correct. Student loan are meant to cover educational expenses, so you can use the money from the government and (possibly) private student loans to pay for the expenses that go along with your academic internship just as you would if you were in a class at school. That could include room and board, travel costs if you have to relocate, transportation, and equipment you need for the internship.
Of course, the debt you take on to get that internship experience could come back to haunt you when you’re out of school and those loans come due. So it’s important to weigh the costs of the internship against its benefits.
Particularly if it’s an unpaid internship, or if you’re required to complete an internship for college credit, you might consider doing some research to find companies that are known for offering applicable career skills and have a positive impact on your resume.
Ask your internship coordinator what tangible benefits you could see—is the internship approved for college credit? Will you get meaningful references? Will there be consequential networking opportunities?
Will the company offer you more than a form letter as a reference? How will this internship help you stand out from others hoping to get similar employment?
Before you commit, you also may want to create a financial plan, starting with figuring out where you’ll live and then working through your budget from there. And you might want to consider asking whether taking a side gig outside your internship is feasible and ok with the company.
Paying Back the Money You Owe
Before you graduate, you may want to begin educating yourself about the best student loan payback options for your situation (depending on what types of student loans you have), look at interest rates, and think about whether you would be interested in consolidating or refinancing your loans.
If you can’t find a better interest rate than you already have on your federal loans, you might want to leave things as they are. Federal student loans offer protections and benefits that won’t transfer to a private loan if you refinance. But you may find you can get a lower rate by refinancing with a private lender, which also could allow you to combine your loans into one manageable payment.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
Student Loan Refinancing
If you are a federal student loan borrower you should take time now to prepare for your payments to restart, including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. (You may pay more interest over the life of the loan if you refinance with an extended term.) Please note that once you refinance federal student loans, you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans, such as the SAVE Plan, or extended repayment plans.
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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