Foreign students paying £6k for work experience

University leavers are desperate. Desperate for jobs, work experience, and now unpaid internships. Almost a fifth of last year's graduates are still unemployed - the highest rate since 1995 - and in some industries an unpaid internship is becoming the norm. Now, they're looking overseas for opportunities that might set their CV apart from the crowd. And they're willing to pay.

When internships at top City firms were auctioned off at the Conservative Party's Black and White Ball on February 12 for as much as £3,000, the practice was roundly condemned. It led to a promise from David Cameron that it would never happen again.

But as demand for internships outstrips supply, the Standard can reveal that middle men are selling placements for thousands of pounds to overseas students.

John Hughes, 21, is one of them. The business administration student from Kansas has signed up with internships company Dream Careers and will start a two-month placement in London in June.

"This is my second year at university and there aren't a lot of internships available," he says. "I'm willing to pay for experience."

Now, for about £6,000 - none of which is paid to the business John will be working at - he will receive an eight-week internship, student accommodation in King's Cross, three meals a day Monday to Friday, plus day trips and seminars. The fee does not include flights.

At those rates, you might think that Dream Careers is offering highly prized placements but incredibly John signed up without knowing where he will be working. "I think they'll place me with a pretty prestigious company," he says. "I think it may be St James's Place."

St James's Place is a respected FTSE 250 company whose name could well provide an early boost to John's career. The financial services group manages £27 billion in funds. Unfortunately, it seems unlikely that Dream Careers will be placing John there because St James's Place has never heard of the company, despite its logo appearing on the Dream Careers website.

Other big names it uses to attract potential customers, such as outfitters Jack Wills and alternative assets firm Preqin, say they have never placed interns through Dream Careers either.

Dream Careers would not comment on why it advertises internships for companies that have never had any dealings with it. A spokesperson said: "Over 12,000 alumni can attest to the impact our internship programmes have had on their careers."

Still, John will get a placement somewhere. Dream Careers guarantees customers one in their chosen sector, and there's no shortage of businesses looking for free labour.

Gus Baker, co-director of Intern Aware, a campaign dedicated to securing the minimum wage for interns, says: "Hiring unpaid interns has become a common way to cut costs."

Nowadays, it seems as if every business has an intern, whether it's a multinational or a start-up. Indigofera, a fashion merchandising company on Hackney's Kingsland Road, has been recruiting interns through Dream Careers for two years.

One is Hayley Moore, a 21-year-old fashion merchandising student from Springfield, Missouri. Hayley will start work at Indigofera in June, where she will be packing boxes and working in the showroom, says a spokesperson.

Hayley was not aware her role would involve packing boxes. "I hope that won't be a majority of it," she says, "because I want to learn a lot while I'm working for an international company."

It's not only US students who are prepared to pay for opportunities overseas - British students are looking abroad too. Jessica Smith, 20, applied for a two-week internship at a Beijing newspaper through a company called Frontier. A second-year politics student, she hoped that interning at the English-language paper would help her land future placements in the UK. She handed over £1,195. Her flights cost an additional £800.

As the date of her departure drew nearer, however, Jessica still did not have the details of her placement. "About two weeks before I was due to go they said that there were no places on any of the English language papers."

Jessica cancelled the trip and asked for her money back and most of it has been returned. A spokesperson for Frontier said that "most people who go on a Frontier project have a thoroughly positive experience".