No, the Government Should Not Give Student Loans for Unpaid Internships

A respected economist offers a dubious policy proposal. 


Edward Glaeser is a respected Harvard economist whose latest column I can only interpret as an attempt to taunt every cash-strapped twenty-something in the United States.

Glaeser is worried that a barrage of lawsuits is about to force companies to shut down their unpaid internship programs, just as Condè Nast did last week. This would be a great loss, he says, because recent college grads don't have the skills employers are looking for. At the same time, he acknowledges that requiring young adults to work for free in order to get basic career experience might give the rich an unfair advantage.

So he's come up with a fix: student loans for internships.

If you're a broke 23-year-old, the concept of taking out debt for an unpaid internship probably sounds something like the two-headed hell-hound of your financial nightmares. But here's the idea in Glaeser's own words.

Critics are right to worry that unpaid internships provide access only to students from wealthy families. One solution might be to expand federal student loan programs to cover students taking unpaid internships, whether or not they receive college credit for them, or even recent graduates. I would set a high bar for making internships eligible for such loans, by requiring official certification of their educational quality. With a loan program in place, more widespread unpaid internships could help move young Americans toward permanent employment. Internships provide a pathway towards employment that should be encouraged — not penalized.

I can sort of see how this line of thinking would develop. If you really, truly believe a dearth of skills, rather than a slow economy, is the problem hampering college graduates in today's job market, you might see internships as a tonic. After all, Germany and other European countries run very successful apprenticeship programs that prepare young adults for careers (though those apprenticeships are paid). And if you believe the only downside to unpaid internships are the class issues, then student loans might sound like an elegant solution. We are just talking about more education. What's so wrong with financing it?


To start, I'm not sure how someone can look at the state of student debt, all $1 trillion of it and change, then decide the government needs to make a whole new class of loans. Nor is it really apparent that skills are the great problem holding back BA's, given the cyclical nature of their employment woes.

Glaeser also glosses over the lack of evidence that unpaid internships regularly lead to work. Quite the opposite, in fact: former unpaid interns are virtually no more likely to land a job out of school than students who never interned at all. Meanwhile, the sorts of companies that regularly carp about skills shortages, like major tech firms, tend to pay their interns because they want to lure the best and brightest into their talent pipelines.

In the end, Glaeser is essentially asking government to subsidize entry level employment at for-profit companies who have realized that many young people don't have to be paid for their work. Because that's what internships are: work. You learn by doing. It's like Montessori with Powerpoints or, if you're a bit less lucky, coffee runs.

There was a time in this country when corporations were actually expected to train and pay their entry level employees. But now, apparently, that's beyond the realm of imagination. Says Glaeser:

At the same time, it’s unrealistic to think individual private businesses will provide new skills to temporary, not-yet-qualified workers simply out of public benevolence. 

And he's right. It is unrealistic at this point to expect companies to be benevolent. But it isn't unrealistic to expect them to obey the law. Telling corporations they have to pay young people for their work might just make them do it.