By Jenna Johnson
Washington Post Staff Writer
Monday, August 30, 2010; B01
Each year, thousands of college students descend on Washington for unpaid internships. It can be a nerve-racking process: sending out résumés, trying to make contacts, interviewing again and again.
Increasingly, many of them are finding an alternative: paying thousands of dollars to a placement company for a guaranteed spot.
It's a business just starting to appear in other cities. In Washington, it's been thriving for years.
Estimates of the annual number of interns locally range from 20,000 to 40,000. The placement programs provide about 2,500 of these interns, with the number growing each year.
For their money -- often funded with taxpayer-subsidized loans -- students get an internship, housing, night classes, tours of Washington and college credit. But most say they sign up for the work experience.
"I wanted experience. I was worried about graduating and not getting a job," said Brian Schiller, 21, a soon-to-be college senior from Sherborn, Mass., who interned at an executive search firm this summer through the Washington Center for Internships and Academic Seminars. "I needed an internship, and they found me one."
The Washington Center is the city's largest program, and for the past three years it has placed about 1,500 interns annually, up from about 1,300 in 2007. It charges nearly $9,000 for a summer, including housing.
-- The Washington Internship Institute. It will place about 200 interns this year, up from 120 in 2007, and charges about $7,000 for a summer.
-- The Fund for American Studies. It has grown from about 370 students in 2005 to 525 this year and charges as much as $7,800 during the summer.
-- The National Internship Program, formerly the Washington Internship Program. It charges an enrollment fee of $3,400 without housing and has seen its numbers increase from 166 students last year to an expected 250 to 300 this year. The for-profit company has doubled its staff in that time and is beginning to expand into other major cities.
"There has never been a harder time to get hired," said chief executive Lev Bayer, whose mother started the company nearly 30 years ago. "There is such a need for internships. We have more students than we can ever deal with."Career investments
Those involved routinely point out that the programs cost less than some colleges charge for tuition. And as long as students receive academic credit, they are usually able to pay using their student loans, federal Pell grants or other forms of financial aid. Most companies offer scholarships, some funded by state governments, some by the companies.
Emily Goyert, 21, and her parents debated her decision to get an internship through the Fund for American Studies. She was unable to transfer any credits to the University of Michigan, where she will be a senior.
"We definitely just viewed it as an investment in my future," said Goyert, who interned at the Living Classrooms Foundation and created a weekend program for a D.C. neighborhood. "There are only so many internships, and everyone wants one."
The tuition payments add up to millions of dollars of revenue for the internship programs, many of which operate as nonprofit groups, pay their top employees six-figure salaries and set up shop in prime D.C. real estate.
The nonprofit Washington Center has its headquarters in a former embassy blocks from the White House. The center had about $18 million in revenue last fiscal year and has a staff of 75, with at least eight employees making six-figure salaries. The president, Michael B. Smith, was paid more than $300,000 last year.
Adele R. Cehrs, a spokeswoman for the center, said in a statement that "like any well-managed nonprofit, the Board of Directors determines the salary for the President of the organization and ensures it is comparable to other similarly sized organizations in the industry."
The Fund for American Studies is a nonprofit group based in a renovated mansion in Dupont Circle and had about $8.4 million in revenue last fiscal year. At least four employees have six-figure salaries, including director Roger R. Ream, who is paid more than $250,000 a year. Ream said his salary is comparable to those at similar nonprofit organizations, and he took a pay cut last year because of the economy.
The topic of tuition and salaries "doesn't come up with our students. Maybe because we have been doing it for 40 years," Ream said. "We have a lot of eager students who come to our program."Eager employees
Employers are usually sent a list of potential candidates to select from. A few pay students a small stipend at the end of the summer or assist with travel costs, but a large majority of these internships are unpaid.
"They are all young people who are smart, motivated, willing to work and willing to do grunt work," said Bernadette Musselwhite, a Montgomery County government business development specialist who has received interns from the Washington Center for two years. "We started with one, then two, then three this summer. We might have four or five interns this fall."
Musselwhite said she did not know how much the program cost students. "We didn't go into the specifics," she said. "We'd like to be in a position where we could pay for interns, but given the current economic crisis, there is no way in the world."
All of the programs say that they have inside connections that can provide students an internship they might not otherwise be able to get. The three nonprofit programs tout their ability to place students at federal agencies. A photo on the Washington Internship Institute Web site, for instance, shows five students standing in front of a State Department sign.
Daniel A. Stewart, the State Department's branch chief for student programs, said the agency has no connection with any of these programs and accepts students only through its own application process.
"The only way they are getting in is if they apply directly through us," he said. "The opportunities in the federal government -- beyond just the Department of State -- are open to everyone."
On top of placing a student in an internship, the placement programs promise to be an advocate for that student -- stepping in if problems arise, helping find another internship if a company cuts its program at the last minute and ensuring that students aren't stuck doing just clerical work. They also promise to vet employers, although the process is not foolproof.
In 2008, the Washington Center was sued by a New Jersey college student who alleged she was sexually harassed while at her internship in a doctor's office during the summer of 2007.
According to the lawsuit, center employees did not visit the office, interview the doctor or investigate his credentials before placing the student. The doctor's license had been suspended for a year in 2003 because he inappropriately touched female patients.
In mid-July, a center employee visited the office, learned what was happening and removed the intern from the office. The lawyer who represented the doctor at the time declined to comment. Messages left for the doctor were not returned.
The case was settled out of court for an undisclosed amount. The Washington Center said in a statement it could not comment on the settlement.
In a statement, Smith said: "As a parent and the president of [the Washington Center], my goal is to work with my staff to carefully evaluate all our host organizations, with [the] same care and consideration I would take if my son and daughter were participating."A safe place to stay
Many of the students in these programs are doing their first internship and also living in a major city for the first time.
"Safety of students is a priority of these programs. As a parent, that's something that's very attractive," said David Fitzgerald, a career center adviser at the University of Iowa, which sends 40 to 50 students to the Washington Center each year. "You don't really want your student finding a roommate on Craig's List."
Each of the programs offers housing, often renting college dorms or floors in apartment buildings. The Fund for American Studies, for instance, has a partnership with Georgetown University, and students are required to live in the dorms, which cost about $1,800 for the summer.
The Washington Center does not require its students to live in its housing, but most do. In recent years, the center has housed interns in six apartment complexes in the Washington suburbs. Half of those buildings are owned by the Paradigm Cos., headed by Stanley W. Sloter, a member of the center's board of directors.
The center paid $1.7 million in rent in fiscal year 2007 to "an entity operated by a member of the board of directors," according to tax filings. In 2008, the center paid $1.5 million in such rent. Sloter referred a call from a reporter to the center.
This summer, the center opened its own dormitory near the New York Avenue Metro station in Northeast Washington. The $38 million dorm can house about 350 students and features a 500-seat auditorium, six classrooms, a student lounge, a fitness center and flat-screen televisions in each room. The project was financed chiefly with tax-exempt bonds.
The facility was built by Paradigm Construction, which was founded by Sloter. Paradigm was awarded the contract through "a transparent process of sealed bids" because it promised to complete the project for $1.1 million less than the second-lowest bidder, Cehrs said.
"Clearly, this board member did not benefit unfairly from this process. The Washington Center and ultimately its students are the true beneficiaries," Cehrs said in a statement.
Four students live in each two-bedroom apartment, cook for themselves and pay $3,540 each for 10 weeks. That housing fee includes furnishings, cleaning costs, utilities, and Internet, cable and phone service, plus the support of full-time resident assistants, Cehrs said in a statement.
"All rental properties have been rented by [the Washington Center] at market or below market rates," she said. The center's "residential housing fee is comparable in price to local Washington area high end residential facilities such as those provided by Georgetown and George Washington Universities."
Dean A. Zerbe, a former senior counsel for Sen. Charles E. Grassley (R-Iowa), who led an investigation into nonprofit groups, said contracts with board members raise "one of the biggest flags."
"How independent as a board member am I if I am getting a sweetheart deal?" Zerbe said. "Are these children's funds, in a sense, being used appropriately?"
Some colleges, including Boston University, Stanford and the University of Texas, run their own programs in Washington. Independent programs such as the Washington Center and the others allow colleges to offer their students a D.C. experience without the liability and cost of setting up their own programs, award credits without tying up campus resources and, in a few cases, continue collecting some of a student's tuition money.
Over the past 40 years, the programs have collectively placed more than 60,000 interns. Some of them participate in alumni networks that function like college alumni associations, fundraise for the programs, join Facebook groups, volunteer to mentor or take on interns of their own.
"I can't wait to get back to school and talk to everyone about it," said Farah Ardeshir, 21, a junior at Eastern Kentucky University who interned at a D.C. human rights research institute through the Washington Center. "Living in the real world, even just for two months, is critical."
Researcher Meg Smith contributed to this report.