Table of Contents
- Are Internships Paid? Understanding Paid vs. Unpaid Roles
- Do You Get Paid in an Internship? Average Compensation Trends
- Are Unpaid Internships Legal Under the FLSA?
- How Do Unpaid Internships Work?
- What Are the Pros of Taking an Unpaid Internship?
- What Are the Cons of Taking an Unpaid Internship?
- Are Unpaid Internships Worth It for Your Career?
- How to Manage Your Finances While Working an Unpaid Internship
- FAQ
Paid and unpaid internships can provide students with valuable work experience in their chosen field. Both opportunities offer training, mentorship, and exposure to professional environments, but only one comes with a paycheck.
Although paid internships are becoming more common, not every student is able to secure one. In some cases, taking an unpaid internship may be worth it, particularly if it provides highly relevant experience, academic credit, or a chance to work for a dream employer.
That said, spending months working without compensation can be challenging, especially if you’re already carrying debt, facing high living expenses, or will need to take on additional work to cover everyday costs. What follows is a closer look at the pros and cons of taking an unpaid internship, along with tips for deciding whether one is right for you.
Key Points
• Paid internships are becoming more common, with more than half of all current internships providing financial compensation.
• Unpaid internships are legally permissible under the Fair Labor Standards Act if the employer ensures the student is the “primary beneficiary” of the arrangement.
• Students can gain significant value from unpaid internships through hands-on industry experience, professional networking, and academic credit.
• Accepting an unpaid position carries downsides, such as the lack of wages, the potential for repetitive tasks, and potential for financial strain.
• Before accepting an unpaid role, evaluate your finances and the quality of mentorship to ensure the growth outweighs the costs.
Are Internships Paid? Understanding Paid vs. Unpaid Roles
Employers today generally prefer offering paid internships. As a result, finding a paid opportunity may be easier than it was in the past. Data from National Association of Colleges and Employers (NACE) suggests that more than half of internships are currently paid.
A paid internship is a professional learning opportunity where an employer provides financial compensation to a student or recent graduate in exchange for their work. Interns may receive an hourly wage, a salary, or a lump-sum stipend.
Unpaid internships are still relatively common, however. An unpaid internship is a temporary work arrangement offered to graduate or college students (and sometimes high school students), so they can gain training and knowledge by working in their area of interest. Interns are able to perform duties related to their chosen career, observe professionals in a workplace setting, and receive direct guidance from mentors. In some cases, unpaid interns receive college credits for their work.
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Do You Get Paid in an Internship? Average Compensation Trends
About 57% of interns are paid for their work, with an average hourly wage of $34, according to Glassdoor. However, that average is heavily influenced by high-paying internships in finance and technology, where compensation can reach $45 to $65 per hour or more. Many internships at smaller companies and in lower-paying industries pay closer to $15 to $20 an hour.
Here’s a look at average internship compensation by field:
• Technology (overall): $44 per hour
• Software engineering: $67 per hour
• Investment banking: $10,000 to $12,000 per month
• Management consulting: $45 per hour
• Healthcare and government: $15 to $25 an hour
• Marketing: $14 to $22 an hour
• Nonprofit, media, and arts: Low or no compensation
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Are Unpaid Internships Legal Under the FLSA?
Yes, unpaid internships are legal under the Fair Labor Standards Act (FLSA), provided the intern is considered the “primary beneficiary” of the arrangement. If the employer is found to be the primary beneficiary, the intern is legally considered an employee and must be paid at least minimum wage and overtime when applicable.
The Department of Labor uses a flexible seven-factor primary beneficiary test to determine whether an internship can legally be unpaid:
• Educational connection: The internship provides training similar to an educational environment, and is often tied to an academic program for credit.
• Academic calendar: The internship accommodates the intern’s academic commitments.
• Fixed duration: The internship is limited to the period in which the intern is receiving beneficial learning.
• Non-displacement: The intern’s work complements, rather than displaces, the work of paid employees.
• No expectation of compensation: Both the employer and intern understand that the position is unpaid.
• No guarantee of a job: The internship is conducted without the expectation of a paid job at its conclusion.
• Primary focus on the intern: The extent to which the internship provides the individual with skills that can be used in multiple employment settings, rather than operations specific to the employer’s business.
How Do Unpaid Internships Work?
Unpaid internships typically require students to work for a set period of time during the school year or summer. Some internships are conducted on-site, while others are remote or hybrid.
Before beginning the internship, you’ll likely discuss your responsibilities, schedule, and learning objectives with a supervisor. Since you’re not receiving wages, employers may offer greater scheduling flexibility than they would for a traditional job.
It’s important to remember that an unpaid internship is not the same as volunteer work. The arrangement should primarily benefit the intern by providing meaningful training, mentorship, and education opportunities that are difficult to replicate in a classroom setting.
What Are the Pros of Taking an Unpaid Internship?
College internships can offer significant value even if they are unpaid. Here’s a look at some of the benefits of taking on an unpaid internship.
Gaining Valuable Industry Experience
As an intern, you’ll receive hands-on training that can help you stand out when applying for future jobs in your field.
Internships also allow you to develop critical workplace skills such as communication, teamwork, problem-solving, and time management. These soft skills are valuable across virtually every profession.
Experience gained through an internship isn’t limited to undergraduates. Recent graduates can also benefit from postgraduate internships that help bridge the gap between school and full-time employment.
Building a Professional Network
Making connections is one of the most important ways to advance your career. Many positions are filled through professional referrals and personal connections rather than public job postings.
A successful internship can help you build relationships with supervisors, coworkers, and industry professionals who may later provide references, recommendations, mentorship, or information about future job opportunities.
Earning College Credit Towards Your Degree
Some companies partner with colleges and universities to offer internships that provide academic credit. In addition, certain degree programs require students to complete an internship before graduation.
In these cases, an unpaid internship may help satisfy graduation requirements while also providing valuable real-world experience.
Helping Inform Future Career Decisions
An internship offers a firsthand look at what it’s like to work in a particular field.
You may discover that your chosen career path isn’t what you expected, potentially saving years of pursuing a profession that isn’t a good fit. On the other hand, the experience may confirm that you’ve chosen the right path and motivate you to pursue additional opportunities in the field.
Easier to Secure
Because they require less financial commitment from employers, unpaid internships are often less competitive and easier to obtain than paid positions.
This can be particularly beneficial in highly competitive industries such as media, entertainment, politics, nonprofit work, and fashion, where paid internship opportunities may be limited. An unpaid internship can help you gain relevant experience, strengthen your resume, and build industry connections when paid options are unavailable.
What Are the Cons of Taking an Unpaid Internship?
While unpaid internships can provide valuable experience, there are also some significant downsides to consider:
No Financial Compensation for Your Time
Many students can simply not afford to work without pay while managing tuition, housing, transportation, and everyday living expenses.
Internships may also create additional costs, such as commuting expenses or temporary relocation during the summer. For some students participating in an unpaid internship may only be possible with financial support from family, savings, or a second job.
Potential for Exploitation
Because wages are not involved, some employers may assign interns repetitive or low-skill tasks instead of providing meaningful educational experiences.
In worst cases, interns may spend much of their time performing administrative work such as filing, scheduling, data entry, or running errands rather than developing professional skills. If an internship provides little mentorship or learning, the value of the experience may be limited.
Before accepting a position, it’s wise to ask detailed questions about responsibilities, training opportunities, and supervision to ensure the role aligns with your career goals.
Socioeconomic Inequality
Unpaid internships can contribute to socioeconomic inequality because they may be inaccessible to students who cannot afford to work without compensation.
Students from lower-income households or those carrying significant student debt may be forced to decline valuable opportunities, limiting their access to industry experience and professional networks.
Because internships often serve as gateways to competitive careers, this dynamic can reinforce existing economics and social disparities.
Potentially Lower Post-Graduation Salaries
Research from NACE suggests that students who complete paid internships often receive more job offers and higher starting salaries compared to those who complete unpaid internships.
The reasons are not entirely clear. Paid internships may provide more substantive responsibilities, stronger training, or greater employer investment. In addition, unpaid internships are more common in traditionally lower-paying industries, which may influence salary outcomes after graduation.
Opportunity Cost
Opportunity cost refers to the value of the next best alternative you give up when making a choice.
By accepting an unpaid internship, you may forgo income from a paid job or miss opportunities to develop other skills, take on freelance work, or pursue alternative professional experiences. The time commitment can be significant, making it important to carefully evaluate whether the benefits outweigh the sacrifices.
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Are Unpaid Internships Worth It for Your Career?
Unpaid internships can be worth it if they provide meaningful experience, valuable networking opportunities, strong mentorship, or academic credit. They may be especially beneficial for students who lack industry experience and can financially afford to work without pay.
However, not all unpaid internships deliver the same value. Before accepting a position, consider the quality of the training, the reputation of the organization, the types of projects you’ll work on, and whether you’ll have access to mentors who can help advance your career. If the internship primarily involves routine administrative work and creates significant financial hardship, the opportunity may not be worth the cost.
Ultimately, the best internship is one that provides measurable career benefits while fitting within your financial circumstances.
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How to Manage Your Finances While Working an Unpaid Internship
An unpaid internship can be a powerful career-building opportunity, but it can also put a significant strain on your finances. Careful planning and a strict college budget can help make the experience more manageable.
• Build a financial cushion: Before your internship begins, consider saving aggressively through part-time work or seasonal employment. Having money set aside can help you cover expenses during periods without income.
• Create a bare-bones budget: Focus on essentials such as rent, food, utilities, and transportation. Temporarily reducing discretionary expenses and finding ways to save on college costs can stretch your savings further.
• Maximize student or intern discounts: Use your ID card everywhere to reduce daily expenses. Student discounts are available for a wide variety of everyday expenses, including public transit, groceries, software, streaming services, and gym memberships.
• Secure a side hustle: Consider taking on part-time, weekend, or evening work to generate a steady inflow of cash while you’re interning. Look for flexible roles like tutoring, freelancing, being a rideshare driver, or food delivery.
• Explore institutional funding: Many colleges and universities offer grant stipends, scholarships, or internship funds specifically designed to support students who accept unpaid internships.
The Takeaway
An unpaid internship can provide valuable experience, professional connections, academic credit, and insight into your chosen career path. For some students, these benefits can create opportunities that lead to future employment and long-term career growth.
However, working without compensation isn’t financially feasible for everyone. The loss of income, potential for exploitation, and opportunity costs are important factors to weigh before accepting a position. By carefully evaluating the educational value of an internship and your own financial situation, you can make a more informed decision about whether an unpaid internship is the right investment in your future.
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FAQ
Do you get paid for internships in college?
Many college internships are paid, but not all. Whether an internship offers compensation depends on the industry, employer, and position. Paid internships are especially common in fields such as technology, finance, and consulting, while unpaid opportunities remain more prevalent in nonprofit, media, and arts organizations.
How much do paid internships usually pay on average?
Internship pay varies widely by industry and location. While many internships pay between $15 and $20 per hour, highly competitive fields such as software engineering, finance, and consulting may offer $40 to $65 per hour or more. Overall, the average internship wage is roughly $34 per hour.
Can an unpaid internship eventually lead to a paid full-time job?
Yes. Many employers use internships to identify potential future hires. Performing well during an internship can help you build relationships, gain references, and demonstrate your skills, potentially leading to paid employment with the organization or elsewhere in the industry.
Are internships paid if you are also receiving college credit?
Not always. Some internships provide academic credit instead of wages, while others offer both credit and compensation. The arrangement depends on the employer and the policies of the educational institution.
How can I survive financially while taking an unpaid internship?
These five strategies can help offset the financial challenges of an unpaid internship:
• Build savings early: Start accumulating a cash buffer months before your internship begins.
• Maintain strict budgeting: Track every expense and cut back on nonessential spending during the internship period.
• Secure flexible work: If your schedule allows, earn supplemental income through weekend gigs or remote freelance jobs.
• Maximize student perks: Use your student ID to score discounts on food, transit, supplies, entertainment, and other everyday expenses.
• Apply for institutional aid: Your college may offer internship grants, scholarships, or stipends for students who take on unpaid internships.
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