On a recent Saturday night in Cancun, Mexico, Kyle Carnes partied with his friends on spring break, listened to a live band and watched fire twirlers spin flaming sticks on the beach.

He couldn't quite relax, though. Every few minutes he had to check his iPhone. Mr. Carnes was waiting to hear whether he had gotten a final interview for a summer internship in New York at a major European bank.

Winning the three-month internship would put him a step closer to his dream job: working on Wall Street.

The financial industry may be in retreat, with tighter regulation, smaller bonuses, layoffs and persistent questions over its ethics and culture. But for hundreds of students like Mr. Carnes, a 20-year-old junior at Tufts University in Medford, Mass., Wall Street still is seen as the ultimate launch pad to a successful career.

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"Don't get me wrong, we know it's not the Gordon Gekko age anymore," Mr. Carnes says. "It's a tougher business and there's a lot more scrutiny, but we also know that once you get accepted into the ranks of the banking elite, you can do any job you want afterward."

Universum, an employer-branding firm that each year asks 6,300 MBA students where they have applied or plan to apply, found that big banks remain in the top echelon, where they have been since 2007. Goldman Sachs Group Inc. (GS) has either been third or fourth on the list during that period. Morgan Stanley (MS) and J.P. Morgan Chase & Co. (JPM) have hovered in or just out of the top 10.

Connie Jao, a 20-year-old junior at the University of Southern California, starts her internship in early June at a large bank in New York—a position she snared in part by reaching out to a USC alumna for help. Ms. Jao says she isn't deterred by the brutal hours that young analysts are expected to work.

"You're putting in so many hours so the ratio [of pay] isn't as glamorous as people think it is, but it's not really a monetary issue for me," Ms. Jao says. "What attracts me to this is the learning experience and getting to build a network."

For all of Wall Street's image problems over the past few years, the lure of "bulge-bracket" firms like Goldman, Morgan Stanley and J.P. Morgan remains strong.

"Students still want to begin their career at a brand-name employer, and banks have done a good job getting their message out to them," says Patricia Rose, director of career services at the University of Pennsylvania.

At the Philadelphia college, 33% of those who graduated in May 2011 and found a job went into financial services. In 2010, the figure was 34%, the same as in 2009, which was a slight decrease from 38% in 2008.

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High pay, long one of the strongest lures of Wall Street, still entices. Even though bonuses are lower than in the past, base salaries remain higher than in most other industries—many first-year employees with undergraduate degrees can earn total compensation in the low six figures. An associate with an MBA can earn a salary of up to $150,000, plus bonus, according to Options Group.

Just as important, students say, financial jobs get them in the door for prestigious positions, greater success and monetary gains later in their careers.

Others say they simply enjoy the cut-and-thrust of the markets. Stephen Reisert, a 20-year-old sophomore at Cornell who plays Division I soccer, has been trying to get an internship this summer in sales and trading.

"Things are so fast-paced and unpredictable, like on the soccer field, and that's appealing to me," he says.

To be sure, Wall Street's own vicissitudes, and the rise of other "hot" sectors such as technology, are deepening the competition in the war for young talent. At Harvard, the number of seniors who took jobs in finance dropped to 17% last year from 28% in 2008.

Many of the most sought-after students are heading to Silicon Valley. Liz Wessel, a 21-year-old senior at the University of Pennsylvania, interviewed with a half dozen top banks her junior year. She ultimately accepted an internship with Google Inc. (GOOG), which led to a job offer. "Many of my finance friends tell me their job is making rich people richer," she said. "My job is going to help develop products that will change the world."

Google and Apple (AAPL) were the top two most popular companies among American undergraduates studying business last year, according to a survey of more than 22,000 students by Universum.

Wall Street's drastic shrinkage since the crisis also is playing a part. At Dartmouth College's Tuck School of Business, 12% of the graduating MBA class will accept investment-banking and sales and trading positions in 2012, a decrease from 23% in 2008. School officials say that is because there are fewer jobs available.

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The number of analysts starting this summer may shrink by as much as 20% from last year, says Chirag Saraiya of Training the Street, a firm that prepares incoming Wall Street analysts.

A smaller Wall Street, however, means stiffer competition for those who want to get in. James Gorman, Morgan Stanley's chief executive, recently called the idea that people don't want to work on Wall Street "ridiculous." Between 78% to 84% of the undergraduate and business-school students whom the firm recently offered jobs accepted them, and most of those who didn't went to rival banks, he said. That rate is in line with past years, according to a Morgan Stanley spokeswoman.

Mr. Carnes, the Tufts junior, argues that Wall Street remains "the premiere job offer after college." But he is biased. He heard back from the European bank after he returned from vacation: He landed a final interview.

—Aaron Lucchetti contributed to this article.

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