It's also important to understand how the internship dynamics change as you progress through the four years of college. Getting a paid internship after your freshmen or sophomore year is extremely difficult. Very few large, "name brand" companies include freshman and sophomores in their internship programs. Those that do typically have ratios along the lines of 90% juniors, 10% freshman and sophomores.
The catch is that landing the junior year internship in large part depends on having at least one previous relevant internship. That leaves most freshman and sophomores struggling to find internships at local businesses in their field of interest. Most of the businesses don't have an actual internship program, have no idea what to do with an intern, and don't have the money to pay one even if they wanted to.
This describes the experience of me and 95% of my friends at Duke over the last 4 years. Many of us have awesome, extremely high paying jobs lined up after graduation, but we got those jobs as a more or less direct result of working for free after freshman or sophomore year.
My personal experience:
Freshman summer: part-time job to support myself, took a summer class, did a lot of (free) work for Duke Student Government
Sophomore summer: 3/4 time job as a waiter in a restaurant to support myself. Spent all my free time programming.
Junior summer: awesome internship at Microsoft.
Post-grad: offers from Google and Microsoft, trying to start my own company.
Basically over the past 20 months or so my pay has gone from ~$6/hr part-time, to ~$75 full time. Trust me, I am not 12-13x smarter, more valuable, or more skilled now than 2 years ago. The system is broken.
Although I never had an unpaid internship my ability to land a paying one after junior year was dependent on the projects I worked on in my free time the previous summer. And that is in the tech industry, which is in by far the best shape. The internship situation in other field (as SandBOx mentioned) is much, much worse.
I'm an NCSU student, so I'm in the same area, looking at mostly the same jobs. What I found is that most students just aren't willing to go through the work to find a job. They want the jobs to be posted somewhere online, so they can fire off a resume they spent a couple hours making (if that). I actually managed to nab a development / systems administration internship straight out of high school for a company out of Durham, mainly because I met one of the management at the company and just asked about a position. I spent two years working for that company (paid, part-time during the year, full-time over the summer) and then a summer and a semester doing [paid] research at NCSU. This summer I've got an internship lined up with Google.
You're absolutely right that a lot of it is dependent on finding internships early on, but I don't think its necessarily that companies aren't hiring underclassmen (though MS, Google, etc. likely aren't), but rather that a lot of students aren't willing to go the lengths to _find_ the job. Not all of them are posted online. Go to your local PUG/LUG/*UG/2600 meeting, and ask around. Most people there will be willing to talk about one with you if you seem relatively competent and willing to learn what you don't know. Plus, as you said, doing projects in your spare time is a HUGE plus. A lot of the things I end up talking about in interviews are side projects that I've done.
Though I'll put the disclaimer that this is all only applicable to the tech field. Unfortunately, other fields don't have it as nicely as we do.
The catch is that landing the junior year internship in large part depends on having at least one previous relevant internship. That leaves most freshman and sophomores struggling to find internships at local businesses in their field of interest. Most of the businesses don't have an actual internship program, have no idea what to do with an intern, and don't have the money to pay one even if they wanted to.
This describes the experience of me and 95% of my friends at Duke over the last 4 years. Many of us have awesome, extremely high paying jobs lined up after graduation, but we got those jobs as a more or less direct result of working for free after freshman or sophomore year.
My personal experience: Freshman summer: part-time job to support myself, took a summer class, did a lot of (free) work for Duke Student Government Sophomore summer: 3/4 time job as a waiter in a restaurant to support myself. Spent all my free time programming. Junior summer: awesome internship at Microsoft. Post-grad: offers from Google and Microsoft, trying to start my own company.
Basically over the past 20 months or so my pay has gone from ~$6/hr part-time, to ~$75 full time. Trust me, I am not 12-13x smarter, more valuable, or more skilled now than 2 years ago. The system is broken.
Although I never had an unpaid internship my ability to land a paying one after junior year was dependent on the projects I worked on in my free time the previous summer. And that is in the tech industry, which is in by far the best shape. The internship situation in other field (as SandBOx mentioned) is much, much worse.