I'm a college student in an engineering field. Last year I applied for and received a co-op at a small but well-known company in my city. It is organized through my university, and we have an informal agreement (no written contract) for me to work three terms at this company. A term is either a semester or a summer break.
I've since worked one term, a semester during which I took no classes and worked 40 hours/week for the company. I really like the company a lot. My coworkers are very nice and helpful, and I'm contributing to real-world projects.
The pay is good, but I regularly hear of other students in the same field earning 15 - 20% more. In fact, working for my university on small projects and research, I'm earning ~30% more, although the work is 8-10 hours/week as opposed to 40 hours/week.
My hourly pay for the first term was agreed upon in the initial job offer. But I've heard from other students at the same company that the pay does not increase in the following terms.
My question is, given the company's history of maintaining the same hourly rate, what is an appropriate way for me to ask the company for a raise? I am consistently working in the field and improving my skills even while taking a full course load, and I believe because of my proven track record with the company and other working experience I deserve to earn as much as other students working in the same field.
One thing I've heard of other students doing is pursuing offers from other companies and then using those offers as leverage to raise their pay with their current company. I have a couple places where I could apply and have a good chance to earn more. But I don't want to "lead on" other employers, and I really would like to stay with this company. It's exactly the type of work I want to be doing, I don't have to relocate, and the people there are awesome.
Any advice out there from students or employers who deal with college students on internships/co-ops?
Edit: summary: If I want a raise from my current company and want to stay at the company, is it better to a) pursue an offer from another company and present the current company the offer for the current company to counter or b) simply ask for a raise, giving my contributions and experience as grounds for a raise.