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Unpaid interns struggle to make ends meet

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Increasingly, companies are reevaluating the legality of maintaining unpaid interns. "More and more companies are not offering these [unpaid internships] because the boundary [between legal and illegal unpaid internships] is close," says John Challenger, CEO of Challenger, Gray & Christmas, an international outplacement firm.

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According to the United States Fair Labor Standards Act, companies can employ unpaid interns provided – among other requirements – on-the-job training is for the benefit of the interns and companies receive no "immediate advantage." This means companies should not profit from an intern's work and in some cases training interns may even impede the companies day-to-day operations.

Unpaid interns in the US haven't tested the law recently, but last April in Germany unpaid interns organized a large-scale demonstration and an online petition calling for an end to unpaid internships. The German government posted the 40,000 signatures on its website, and Germany's Labor Minister at the time, Franz Müntefering, publicly condemned unpaid internships. The protests prompted the creation of Fair Company, an alliance of organizations that have committed to paying interns reasonable wages.

Given current trends, such an outcry among American interns is unlikely, says University of Washington's Neff. Because internships are so important to many students, Neff believes that students would not speak out for fear of damaging future career options.

"In the last five years, we've seen that students and their 'helicopter' parents have been homing in on internships ... as engines of career success," says Oldman. "Helicopter" parents are so-called because of their intense involvement in their children's lives – they tend to hover over them.

In 2006, 84 percent of college graduates said they'd completed at least one internship, paid or unpaid; 53 percent said they'd completed two or more internships; and only 1 percent said internships are not important, according to Vault's annual survey. Compare this with 1980, when only 3 percent of college graduates said they'd had an internship experience.

"One reason that companies can rely on unpaid internships is that people are lining up to do them," says Neff.

After graduating from New York University, aspiring comic Michael Feldman indirectly paid $1,600 so he could intern at "The Daily Show," a popular, satirical news show on cable TV.

"I really wanted to work at 'The Daily Show,' so I thought I'd start out there as an intern," says Mr. Feldman.

The program requires that all interns receive college credit. Feldman, who had just graduated in the spring of 2003, made a deal with NYU to earn the fewest credits possible, so he'd be eligible for the internship. That meant paying NYU $1,600 for credits he didn't need.

Through personal savings, help from his parents, part-time jobs, and free meals on the set, Feldman managed to make the internship work. And after four months as an unpaid intern, the show offered him a paid position.

Vault's Oldman remains optimistic about the potential of internships. "While there are less satisfying internships out there, the majority of them can provide a wonderful steppingstone to the career of your choice," he says. "Or, at the very least, it can help you weed out what you don't want to do."

Neff provides her students with cautionary advice. "Buyer beware: In terms of your time, savings, and the money you will need, you are buying an opportunity for your career. Make sure it's worth every penny that you invest."

Despite the hardships Vanasco faced, she believes her investment was worth the sacrifices. She now works as a research assistant for a prominent French philosopher, writes freelance book reviews, and still spends one day a week working as a reader for the publication where she interned.

She'd wanted to intern there "more than anything," she says in retrospect. "And I can't emphasize enough how delighted I am that I did. I've met so many poets, writers, and editors whom I've long admired, several of whom I now consider dear friends."