WSJ Your Money Briefing - University ‘Co-Op’ Programs Are Becoming More Popular

Episode Date: August 21, 2024

More students are flocking to university “co-op” programs where they can receive paid full-time work experience. Wall Street Journal reporter Sanvi Bangalore joins host Ariana Aspuru to discuss how these career-oriented academic models are boosting students' chances of landing a job after graduation. Sign up for the WSJ's free Markets A.M. newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Introducing TD Insurance for Business with customized coverage options for your business. Because at TD Insurance, we understand that your business is unique, so your business insurance should be too. Contact a licensed TD Insurance advisor to learn more. Here's your money briefing for Wednesday, August 21st. I'm Arianna Aspuru for The Wall Street Journal, filling in for J.R. Whelan. Universities with co-op programs where students can get full-time work experience are becoming more sought after among applicants. The programs give students the chance to switch between classes

and up to 18 months of paid work. And that could lead to a better chance of landing a job after graduation. You can leverage to get a job with another company or you could even target the company that you co-opted for and try to get a full-time offer with them. And a lot of times, like, they've already invested six months into you to really work with you and train you, so they have more of an incentive to hire you.

We'll talk to Wall Street Journal reporter Sandhvi Bangalore after the break. So what's it like to buy your first cryptocurrency on Kraken? Well, let's say I'm at a food truck I've never tried before. Am I gonna go all in on the loaded taco? No, sir. I'm keeping it simple.

Starting small. That's trading on Kraken. Pick from over 190 assets and start with the 10 bucks in your pocket. Easy. Go to kraken.com and see what crypto can be. Not investment advice. Crypto trading involves risk of loss. See kraken.com slash legal slash ca dash pru dash disclaimer for info on Kraken's undertaking to register in Canada. In a tight labor market, colleges that offer programs for students to get work experience beyond just internships have become more appealing to applicants. Wall Street Journal reporter Sanvi Bangalore joins me to discuss. Sanvi, how do programs like these work? Co-ops are six months long, which differentiates them from the typical like 10 to 12 week internship

because they really allow students to work full-time, oftentimes for credit and for pay, and really allow them to get fully immersed in their field and do work that normal full-time employees would do. How different is this from an internship? Internships are usually like 10 to 12 weeks. Oftentimes they are part-time in addition to schoolwork during a semester or they're in the summer, whereas co-ops are six months long and students work full-time, so usually like 40-hour work weeks. You get to be a lot more immersed in a co-op and really have that be your main focus.

And they're paid pretty well. They can make up to $50 an hour in tech, very comparable to a full-time job salary that you would earn. And on top of it, they don't have to pay tuition that semester, and then they also make a good amount of money at their co-op, so they have more money to spend on the weekends and they can also help contribute to their rent or their tuition and other things so the pay is definitely a huge plus. Why are students considering this work experience when choosing their school?

It's becoming more well known that employers are expecting real work experience on resumes from college students when they're looking to hire people and having real deliverables that you've worked on and real work experience to talk about in your interviews and on your resume really stands out because employers want to hire students that are employment ready. The bar is just a lot higher now to get hired out of school than it used to be. The schools that you highlight in the story are Northeastern University and Drexel University. What are some of the results that they've seen with their students?

The vast majority of students are employed nine months after graduation. Their rates are a lot higher than the national average. A lot of times they get hired out of their co-ops, which is a huge draw. So it's like a bridge to having that full-time job afterwards? Yes, it could be a bridge in different ways. You have the work experience from your co-ops to highlight on your resume,

which you can leverage to get a job with another company, or you could even target the company that you co-opted for and try to get a full-time offer with them. And a lot of times, like they've already invested six months into you to really work with you and train you. So they have more of an incentive to hire you. Does this also influence the admission rates for schools with co-op job programs? Yeah.

So we saw with Northeastern specifically a really dramatic shift in the number of applications and their acceptance rates. So about like 10 years ago, it was in the 30 percent and now it's like less than 6 percent. So it's gotten to the Ivy League level of selectivity. And that could be because of various different things like marketing and ways that they accept students but the co-op program is what they attribute their lower acceptance rate to because it's just becoming so popular and students are craving that work experience while they're in school. You spoke to students who participated in these programs.

How did it work out for them? For most of them, they attribute a lot of their career success to the co-op program because oftentimes students at Northeastern and Drexel will do multiple co-ops. So they'll do like two or three and maybe their first co-op wasn't what they thought it would be and they didn't like some of the work that they had to do. And that led them to pursue a different type of field for their second co-op and maybe their third. Their experiences throughout their co-ops, whether they were good or bad, helped give them an understanding of what they want to do after college. It really gave them a head start on that to actually work and figure out what they like and what they didn't like while they were still in school.

When reporting the story out, was there a specific program that stood out to you? Yeah. So there is a company called Zaxby's Coffee and they're a chain all across the East and the Midwest. And they've partnered with more than 30 universities. And they basically have these really coveted positions called student CEOs where every year they hire about 60 college students to run a Zaxby's location full-time for six whole months and they have a lot of responsibility for someone who's still in school because they're often managing over a million dollars in annual revenue They are responsible for hiring and firing coffee shop staff, ordering inventory, sharing

a monthly income statement with the company's corporate accounting team. Is having work experience like this or one of these other programs becoming more of a leg up for these job seekers? Yes, for sure. So I spoke with Macy Andrews, who is the vice president of communications at Cisco, and she has a lot of experience in hiring in her past. And she said that work experience is kind of just undebatable when you're trying to hire someone, because a lot of these other metrics that normally come out of school, like GPA,

are sort of hard to neutralize and to really understand what the student is capable of and just completing courses, earning the credit, earning a grade isn't really enough. You also need to have that work experience and show that you can apply what you're learning in your classes to the real world. That's WSJ reporter Sanvi Bangalore and that's it for your money briefing. We'll be back later this afternoon with the bonus episode of our series Gen Z and the Debt Trap, where we'll discuss how Gen Z's spending habits could be making their financial problems worse.

This episode is produced by me, Arianna Aspuru, with supervising producer Melanie Roy. Thanks for listening.