Are Unpaid Internships Worth It? Weighing the Pros and Cons

An internship is a structured learning experience that gives you an opportunity to break into the industry or career of your choice. Sometimes an internship opportunity comes along that sounds promising and ticks all the boxes except one-it’s unpaid. This controversy around whether or not an unpaid internship is worth taking comes down to understanding the pros and cons. And, of course, most of the time the “worth” depends on the internship itself, the supervisor, potential coworkers, and job perks.

Understanding Internships

Internships can be either part-time or full-time, and you often have a mentor who provides guidance and feedback along the way. They are professional experiences offering training to college students and recent college graduates.

The Legality of Unpaid Internships

According to the Fair Labor Standards Act (FLSA), any “for-profit” employers are required to pay their employees. But, this is where the line gets blurred, as interns and students are not always considered “employees” under FLSA. In order to determine this, a “primary beneficiary test” is used by the courts to assess whether a student qualifies as an employee.

They use seven factors to examine who benefits more from the relationship: the intern or the employer. Unpaid internships may be legal, but this question is tricky, as interns and employers may disagree on who benefits more. It’s safe to say both benefit.

Paid vs. Unpaid Internships: Key Differences

To help you decide whether to take an unpaid internship, it’s helpful to understand the difference between paid vs. unpaid internships. It might seem like there’s an obvious answer: the paycheck (or lack thereof). But in reality, money isn’t the only thing that sets paid vs. unpaid internships apart.

A major difference between paid vs. unpaid internships lies in the flexibility and project selection. “When you think of paid internships, they are often pretty set in stone,” McCord says, adding that this is especially true at large companies. “You are going into an already set field. With an unpaid internship, because you’re working for free, you may have more leverage to ask to work on specific projects of interest to you, McCord adds.

The Benefits of Unpaid Internships

You might be wondering, “Why would anyone be willing to work and not get paid?” However, if you can manage without the financial benefits of a paid position and the opportunity is related to your potential career, it could be worthwhile to accept it for the other experiences you will get.

Gaining Valuable Experience

The goal of any internship is to earn valuable, business-world experience. A college lecture can only give you so much insight into a career. Having an internship allows you to really experience it firsthand. Generally, you’ll choose your internships based on your career interests. This means you’ll be working in a field relevant to your long-term aspirations.

Testing the Waters

In other words, it helps you test drive a career that you are considering but may not be 100% sure about. Even if the internship is unpaid, you’re still learning the ropes and building blocks of what might be your future career path. A pre-career pivot can save you potential losses down the line.

Earning College Credits

Oftentimes if an internship is unpaid, they’ll “pay” you instead with college credits. These credits count towards your overall graduation requirements, and you essentially get them for free (you pay with your time and work, but not your money). This is an opportunity for students to combine college completion and employment experience.

Networking Opportunities

They say it’s all about who you know, and you’ll get to know plenty of people at an internship. Internships are an important source of professional contacts, so it’s important for both students and career changers to build these relationships. By connecting with your coworkers, supervisors, and any other contacts you might make while working, you open up many doors of potential opportunity. Maybe a coworker has a friend or contact who is looking to hire a candidate such as yourself. Or maybe you enjoyed the internship so much that you’d like to work at that very company after graduation. Strive to make a good impression on your bosses and colleagues. Unpaid internships are no different. Working hard and showing off your problem-solving skills is the best way to impress.

Resume Building

An internship is an opportunity to demonstrate your dedication, experience and skill set to potential employers. “Even if an internship is not paid, you can put that experience on your resume,” Giese says. “That’s really important. For many industries, relevant experience is just as important (if not more) than the degree you hold. In fields like marketing, design, or media, unpaid internships often allow you to build a portfolio of real work that can be showcased to future employers.

Less Competition

Unpaid internships are much less competitive. They are becoming increasingly common these days, meaning there is more supply. Additionally, employers are more likely to respond to unpaid internship opportunities. This is especially common among small businesses. Smaller companies may not have the budget to pay you. But they may still be good options.

Flexibility and Low-Risk Environment

By nature, an unpaid internship allows you the chance to grow and learn about the job and industry without some of the expectations of a paid role. With an unpaid internship, there are no obligations. There should never be any pressure on you to perform.

Potential for a Job Offer

While it will vary, some employers consider unpaid internships to be auditions for full-time roles at the company, according to Giese. Though it is not always guaranteed, many unpaid internships can result in receiving a job offer at the end of your time. Remember, they’re not just going to hand you a job because you are an intern. You have to work hard for it. Ask questions throughout your process, like “How am I doing? Do you see any areas for improvement? Let’s look at the data.

Read also: Are Unpaid Internships Legal?

The Downsides of Unpaid Internships

Starting with the first and most obvious downside: you won’t get paid. This means you will be putting a lot of time and hard work into your internship without the reward of a paycheck. And since you’re not earning anything, it can put a financial strain on you. Especially if you are trying to pay for college and the cost of living with little to no help.

Financial Strain

Unpaid internships don't just not compensate interns. They may actually end up costing you to do the internship. The financial stress of getting unpaid experience is not worth it for many. Others are forced to live at home or dig into their savings to afford an unpaid internship.

Potential for Exploitation

It can be tempting for employees to dump all of the tedious, menial tasks onto the intern, such as filing paperwork or making copies-especially an unpaid one. That’s entirely up to you. Not all internships are created equal. Ask yourself: Will this position provide you with meaningful learning opportunities?

Lower Job Offer Rate

News, 65.4% of paid interns were offered jobs upon completion while only 38% of unpaid internships received job offers.

Ethical Considerations and Impact on Employer Brand

Unpaid internships might seem like a cost-free way to access entry-level talent, but the reality can be quite different. Organizations that rely on unpaid labor often face significant drawbacks, including reduced productivity, potential legal risks, and lasting harm to their employer brand. In today’s environment, where social responsibility and ethical business practices are increasingly valued, unpaid internships are not only outdated but may also negatively impact your organization’s reputation and long-term success.

Unpaid interns are not only undervalued but also represent an unintentional cost to organizations. The absence of compensation can negatively impact engagement, enthusiasm, and performance. Unpaid internships also perpetuate systemic barriers to entry. The Economic Policy Institute has found that these opportunities disproportionately exclude students from low-income backgrounds and communities of color, reducing diversity and innovation within the talent pipeline. The ethics of unpaid internships cannot be overlooked. These programs often exploit ambition under the guise of opportunity, requiring interns to perform meaningful work without compensation, which would never be expected of full-time employees or contractors.

Legal Risks

One of the most significant risks of unpaid internships is legal exposure. Under the Fair Labor Standards Act (FLSA), interns must be compensated if their work provides tangible benefit to the employer. Many organizations assume that labeling an internship as “educational” or voluntary exempts them from paying wages, but the law often states otherwise. Department of Labor uses a seven-factor “primary beneficiary test” to determine whether an intern should be classified as an employee. A 2017 report by the Economic Policy Institute highlights the increasing number of lawsuits filed by unpaid interns, many of whom have successfully claimed wage theft or employment misclassification.

Financial Planning for an Unpaid Internship

If you’ve considered the benefits of an unpaid internship and are seriously thinking of accepting one, you’ll need to be sure it fits into your budget. However, if this isn’t your situation, having adequate financial reserves is critical. Before accepting a position, you’ll need to have saved up enough money to cover your cost of living through the duration of the unpaid internship, Giese says.

Don’t have a budget yet? Now’s a perfect time to create one! Tally up your savings and monthly essential and non-essential expenses for a full picture of your finances. Multiply your monthly expenses by the estimated duration of your internship. (Remember: Internships generally last anywhere between two to six months, so round up to ensure your savings are enough).
Next, turn to your savings. Take a peek at your savings accounts and ask yourself: Does the amount you have saved cover the total you just calculated?
Giese recommends modifying your budget prior to starting the internship. To avoid any potential hiccups, revise your budget prior to even interviewing just to be safe. If the math checks out and you can afford an unpaid internship, go ahead and apply!

For many people, money is a major barrier to accepting an unpaid internship. If that’s the case for you, McCord suggests bringing it up with the employer. “Ask: Is there any way this could be paid?” she says. These questions are fair game, Giese says, but be sure to have this conversation upfront during the interview process. Not an option? McCord suggests taking on a part-time job while you complete your unpaid internship.

Making the Decision: Is It Worth It?

There are many valuable experiences you can get out of an internship besides a paycheck, but you should weigh the pros and cons before making the decision. Even if an internship is not paid, it’s still a great investment into your future career. Ultimately, it’s about choosing what is going to be best for you.

Short answer: They can be. “You have to discern upfront: Are you going to get something out of it that you really need to help your career?” Giese says. There are a lot of questions to answer as you consider taking an unpaid internship: Can you afford to? Will you have the time? Will it provide valuable experience and help you sharpen your skills? “An unpaid internship where you’ll gain provable skills and experiences is better than getting paid $15 per hour to get coffee,” McCord says.

To make sure your time investment is worth it, Giese suggests asking yourself: At the end of the internship, will I have a skill or an addition to my portfolio? “You have to make sure the value you’re receiving is worth the investment you’re making in it from both time and maybe a money standpoint.

Internships shouldn’t be considered permanent roles, says Ray Giese, owner of career coaching firm Career & Financial Pathways. For that reason, he adds, you’ll want to understand exactly how long the internship commitment is before considering the role. “Getting into the flow of a workplace is going to take at least a month or two, both in terms of roles and responsibilities,” Giese says.

Tips for Securing an Internship

Have you decided that an unpaid internship is not for you? If so, we want to help you land the paid opportunity of your dreams. Some sectors tend to pay their interns more often than others. For example, technology, consulting, and finance tend to offer paid opportunities.

If you start applying for summer internships at the end of the school year, you are already behind. Strong applicants start applying as early as the fall of the previous year. 59.4% of students who did not undergo an internship cited not knowing how to find opportunities as a major barrier to entry. You may have your sights set on a single company or role. But if you want a paid opportunity, it may be better to cast a wide net. As mentioned, some of the most competitive internships want applicants to have experience already. Alumni, personal contacts, and even social media can help you land the internship you want most.

When looking for your next internship opportunity, whether it’s pre- or post-graduation, it’s important to carefully consider which to pursue. There are certain factors that you will want to think about before applying, beyond employer and location of work. Pay close attention to the attributes listed and the filters you can use on Handshake to fine-tune your search.

Your first internship experience is just as important as your first time in an entry level position. This is your time to be as selective as you like, as it can be easier to be flexible with your first opportunity.

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