Is it ethical to make students pay for internships?

From their perspective, I suppose there’s not much of a difference. These are indeed 40 hrs/week summer internships (we don’t do anything shorter than that). Of course, it’s not expected that the interns will be as productive as a college grad, but in any case it’s around a month before anyone is really productive anyway (whether intern or senior engineer), and interns are still cheaper, so it makes sense to stuff the training period into one. We would never do a 150 hour internship since the student would never get past the learning curve.

That said, the internships count for college credit. And the value to us isn’t so much in the work the interns produce (which is often questionable) but in the hope they will come back to work with us full time. In some sense, it’s just a very long term interview. The effective cost may be $40k or so to weed out the people that aren’t a good match but that’s still way cheaper than if they were a full time employee.

Also, for what it’s worth, I started my current job as an internship, and came back to work shortly after since I only had two quarters left at school. I didn’t need the credits. In some sense, school was just a short gap in my full-time employment ('course, I got a good raise since I was now a graduate). Many interns start earlier, though, so for them it’s more like a traditional internship. The laws have also changed since I was one and the company is now required to go through various motions that are expected of internships (like keeping track of hours).