On Internships, Dartmouth Gets It Wrong
The latest big news in work-based learning is that Dartmouth College has raised a $30M endowment to support internships. Dartmouth students can now access up to $6,500 in college funds to transform an unpaid internship into a paid one.
That’s helpful because unpaid internships are the scourge of work-based learning. They’re inequitable and discriminate against low-income and underrepresented students. But Dartmouth’s initiative also reflects a deeper misunderstanding in higher education: the view that the shortage of quality, paid internships is a funding crisis, or something colleges can solve on their own.
It’s not. It’s an employer supply problem. The shortage isn’t students willing and able to intern. Most unpaid internships have lines out the door, including students who can’t afford to work without being paid. The shortage is employers willing and able to create internships.
In fact, Dartmouth’s new internship fund may reinforce the dynamics causing the shortage.
The internship supply shortage is dire. In a recent study by the Business Higher Education Forum, 8.2 million college students wanted internships but only 3.6 million were available and only 2.5 million were quality internships. That means for every student landing a quality internship, two were left out. Why aren’t employers more cooperative? As Tom Monahan, CEO of Heidrick & Struggles, recently put it, “higher education talks about companies as ‘employers’ first, when in fact their primary interest is in delivering goods and services. That businesses employ people to do that work is important, but it’s not their fundamental focus.” In short, most companies (not employers) are not in the business of hiring and paying unproductive workers.
The internship state of play is as follows. A handful of large companies in a few industries – notably investment banking and consulting – offer internships at some scale. These organizations invest in internship infrastructure because their business models – reliant on large armies of high-ceiling junior talent – depend on it. But 98% of businesses don’t know how to scope projects for interns. They don’t know how to supervise inexperienced workers. They don’t know how to structure onboarding, provide feedback, ensure compliance, or convert interns into full-time hires. Managers (under increasing individual performance pressure) perceive internship facilitation as babysitting rather than value creating. HR teams lack systems and supervisors lack time. So 98% of companies default to the easiest answer: don’t hire interns at all, or at least not at scale.
This is one reason internship supply has remained stubbornly constrained even as colleges endlessly promote “work-based learning.” For most businesses, interns are a pain with no immediate payoff. They require resources to recruit, hire, onboard, train, identify projects that are meaningful but not mission-critical, manage, mentor, provide feedback, and manage risk. And by the time they become productive, interns have returned to school with no guarantee of returning.
So while higher education conferences are filled with panels about removing barriers to experiential learning, awarding academic credit, studying best practices, and creating reflection exercises, employers are asking a more basic question: Who’s going to help me actually run this thing?
There’s a long road ahead to make it easier for companies to say yes to internships and yes to hiring interns. Sadly, Dartmouth’s $30M does none of that. As a result of Dartmouth’s new endowment, employers already reluctant to pay interns learn they don’t have to because Dartmouth absorbs the cost. Dartmouth students continue competing for a small number of prestigious roles. The underlying market failure remains largely untouched and companies never develop the operational muscle memory required to build sustainable internship programs.
And this muscle memory is precisely what the economy needs most right now.
But imagine if instead of primarily subsidizing students, Dartmouth asked employers to apply for the funding. That could help address the shortage. Companies seeking funding could be required to create net-new internship jobs. They could be required to provide structured supervision, intern payment verification, measurable learning outcomes, and pathways to conversion hiring. The subsidy could offset onboarding costs, manager time, and administrative burden – the very frictions preventing most companies from participating.
Most important, employers would begin building the internal systems and habits necessary to sustain internships that create durable enterprise value without perpetual university intervention.
That’s the difference between subsidizing participation and building capacity.
Dartmouth’s new $30M fund is like handing out meal vouchers outside a restaurant that’s running out of food. Helpful to individuals? Perhaps some. But it doesn’t solve the supply problem inside the kitchen.
