Get Career Skills — Not Credit Card Bills — at an Unpaid Internship

It can cost thousands of dollars to do an unpaid internship, and many take on credit card debt to get by. Here are ways to limit that high-interest debt.
Sara Rathner
By Sara Rathner 
Edited by Erin Hurd

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Every summer, students flood offices as unpaid interns, soaking up knowledge and seeking positive references as they take lunch orders and organize storage closets. But this reliance on unpaid work leaves behind students who can’t afford to work for free. Between temporarily relocating to another city, buying and maintaining office-appropriate attire, and paying for everyday costs, it can cost thousands of dollars to add a few lines to your resume.

According to Carlos Mark Vera, co-founder and executive director of Pay Our Interns, a nonprofit fighting to end unpaid internships across the country in all sectors, unpaid internships disproportionately harm specific populations. Women work for no pay more often than men, and compared to white interns, Black and Latino interns take on debt more often during their internships. “It really does create this glass ceiling for people of color,” Vera says.

Vera, who is still paying off the credit card debt he amassed when interning at the White House seven years ago, was inspired to launch Pay Our Interns after a conversation with a younger college student who was skipping buying groceries to afford dry cleaning for his internship clothes. “I think this whole grind/hustle mentality is so ingrained, that you have to pay your dues,” Vera says. “It’s daring to imagine how things could be.”

Sadly, unpaid internships are still the norm. Perhaps the Great Resignation will inspire employers to pay interns for their labor, as they should. But until then, if an unpaid internship would help you gain experience, here are some ways to soften the financial burden and limit how much you put on your credit card to get by.

Know your rights

The U.S. Department of Labor has guidelines on what constitutes a legal unpaid internship — your work can’t displace that of a paid employee, for example. If you suspect your internship is in violation, you can file a complaint to the Department of Labor or your state labor agency. You may be entitled to back pay.

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Seek scholarships and specialty programs

Many universities offer scholarships specifically for unpaid internships, depending on your school and major. You need to apply and funding isn’t guaranteed, but the effort can pay off.

You can also find paid opportunities through specialty programs created by nonprofits and professional organizations. For example, Black and Latino aspiring financial planners can apply through the BLX Internship Program to be placed in a paid internship at a fee-only financial planning firm. According to Luis F. Rosa, a certified financial planner and co-founder of the BLX Internship Program, they placed 38 applicants into internships last year, and of those, 20 got job offers.

Fund unpaid work with paid work

“I would combine an internship with other side gigs or part-time jobs,” says Mark Reyes, a certified financial planner at Albert, a financial wellness app. “Depending on the internship time commitment, you may be able to balance more than one job at once.” However, he cautions that this can quickly lead to burnout.

Vera felt the pressure as a student working part-time while interning 20 to 30 hours per week. “Sometimes I was fighting not to fall asleep while doing the internship,” he says.

School plus two jobs is a lot to handle. To ease the burden, you can work for pay during the school year and save that money to cover the cost of a summer internship. Or limit unpaid work to a part-time schedule so you can also have time for paid work.

Gain internship experience within paid jobs

If you need the earnings from your paid job to fund tuition, living expenses and other costs, it can be difficult to earmark some of that money toward supporting yourself during an unpaid internship. But your paid job might already provide the chance to learn beyond your actual role.

Rosa couldn’t afford unpaid internships as a student because he contributed financially to his family. He found he was able to create internships within some of his paid jobs, like when he did office work at a law firm and asked to also spend some time learning about the industry.

Embrace remote opportunities

The pandemic transformed many office jobs into fully remote positions, and that’s a benefit for interns who can’t afford to spend a summer in an expensive major city. With a remote internship, you’ll avoid paying for relocation, commuting costs and work clothes. Plus, having remote work experience on your resume will strengthen your candidacy for a virtual position in the future.

Use student loans instead of credit cards

You can use funds from your student loan for living expenses if you’re doing an unpaid internship for college credit. It’s still debt, but student loans charge lower interest rates than credit cards.

“People have misconceptions that all debt is bad, but student loans are there to add value to your life,” Reyes says. “It takes discipline and it’s not for everyone. It’s not free money, but it’s cheaper debt than credit cards.”

This article was written by NerdWallet and was originally published by The Associated Press.

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