Internship postings on Handshake, a career networking site for college students and graduates, declined by more than 15 percent between January 2023 and January 2025, while the share of graduating students who applied to at least one internship rose from 34 percent to 41 percent. Yet even as internships grow harder to find, they're also becoming more important. According to the National Association of Colleges and Employers, internship experience with an employer’s organization or industry is among the most influential factors when employers choose between otherwise equally qualified candidates.
Some colleges and universities are meeting this problem by providing credits for work experience, revamping on-campus work opportunities or directly partnering with local employers. If they don't, some workforce and higher-education experts warn, students will be left behind.
INTERNSHIPS GROWING IN VALUE
Courtney Brown, vice president of impact and planning for the higher-ed philanthropy Lumina Foundation, said growing competition around internships reflects a broader shift in the relationship between higher education and work.
“Employers are demanding this work experience,” she said. “They want to see that, but they're unwilling to provide it.”
“As [employers] become leaner and are cutting costs, they’re trying to take that training piece off,” she said. “Institutions are thinking that’s still part of the employer’s job, and so we create this gap where students are falling between because they think they're getting everything they need from higher ed, while employers are saying, ‘We need more.’”
The degree itself has not lost its value, according to Lumina Foundation and Gallup research. In a recent employer study, Lumina and Gallup surveyed 2,000 U.S. hiring decision-makers and found that they still prefer applicants with degrees or credentials, even as they also say many new hires need additional training. Additionally, unemployment among young adults, both with and without bachelor’s degrees, is increasing and above the overall rate of unemployment, according to data from the U.S. Bureau of Labor Statistics.
ARTIFICIAL INTELLIGENCE CHANGING SKILL SETS
Some students and employers worry that AI could reduce the number of entry-level opportunities available to recent graduates. Nathan Goldschlag, an economist at the Economic Innovation Group, said workforce data does not yet provide clear evidence that AI is driving the weakness in the youth labor market.
In Economic Innovation Group research based on the U.S. Census Bureau’s Business Trends and Outlook survey in 2023 and 2024, 95 percent of firms that used AI said it did not affect their hiring practices. Among the remaining 5 percent, about half said AI caused a reduction in hiring and half said it caused a boost.
The same study found that firms were more likely to use AI to augment workers’ tasks than to replace workers altogether. Goldschlag said rather than replacing roles, he sees more of AI’s impact in the skill sets employers are seeking.
“If it hasn’t [changed workforce expectations] yet, it absolutely will,” he said.
In its 2025 Future of Jobs report, the World Economic Forum found that employers expect 39 percent of workers’ core skills to change by 2030. Analytical thinking ranked as the most important skill, while AI and big data literacy, resilience and adaptability were among the fastest-growing skill areas.
Brown said on-the-job experience, like internships, demonstrate application of both technical and human skills, and that institutions will likely need to play a larger role in helping students gain experience in the future.
HOW COLLEGES CAN RESPOND
Brown said colleges should continue building partnerships with employers to create pathways to internships, apprenticeships and other forms of work-based learning.
In a webinar May 13 hosted by the Lumina Foundation, Scott Fleming, executive director of the State Council of Higher Education for Virginia, also stressed the need for this.
“The degree is important, but did you also get work-integrated learning or an internship, project-based learning, undergraduate research, or something else as part of that education enterprise?” he said. “Because that, to an employer, signals that you have developed those skills along the way.”
Some institutions have expanded cooperative education programs that integrate classroom instruction with paid work experience. Northeastern University, for example, has long operated a co-op model that places students in extended work assignments connected to their academic programs.
Others are experimenting with apprenticeship models beyond traditional skilled trades. Reach University in California, for example, offers apprenticeship degrees where half of student credits come from workplace experience at a living wage. The other half comes from night classes, in which Reach pledges students will accrue no debt. In 2023, Reach pledged to deliver 3 million of these degrees by 2035.
These models require institutional partnerships with employers, Brown said, but universities could also make better use of their own hiring power, rethinking on-campus jobs and work-study programs.
“I think we could elevate those positions into more internship-like positions,” she said.
Even without changing the tasks of an on-campus job, universities could improve students’ training on communicating the skills they built to future off-campus employers.
Students have shown a responsiveness to labor market trends, changing their majors to prepare for AI’s impacts.
“Higher ed is going to have to continue to shift, to ensure that they have these opportunities for students,” Brown said. “The institutions that have the opportunities are the ones that are going to get the students.”
