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Coming Soon: Cash for College Students’ Good Grades

For the past several years economists and educators have been studying the impact of incentives — monetary and other valuable gifts — on student performance. Now a recently launched Web site, GradeFund, takes the idea of incentives and aims to utilize them as a practical solution for paying for college.

Students aged 13 and up (including graduate school) can easily go online and create a profile with the objective of getting sponsors who contribute money for their good grades. Parents can create profiles for younger children. The students must upload official transcripts to verify grades. Sponsor pledges start at $5. They must direct the money to a specific student and specify the criteria, such as grades of A. The way the site is marketed is that the students are earning the money for college, although GradeFund does not presently monitor that.

Dr. Kirabo Jackson, assistant professor of labor economics at Cornell University’s School of Industrial and Labor Relations, studied an incentive-driven program for high school students and teachers in Texas. The program, run by Advanced Placement Strategies, Inc. was implemented in high schools in largely low-income, inner-city areas where the majority of students are Hispanic or Black. The goal was to improve college readiness among the students by setting up a program to motivate them to take advanced placement courses.

Teachers were provided additional training and were given monetary rewards for students who passed AP exams, while students were given monetary rewards for passing.


“The program increased the number of students who were taking AP exams,” Jackson says. “It was also associated with an increase in the number of students who had high SAT scores.”

The program was not only associated with an increase in SAT scores, but also an increase in college enrollment, Jackson adds.

Motivating more inner-city kids to go to college is a positive development, but with that development comes the need to pay for college. GradeFund aims to utilize good grades as a practical solution to rising tuition. While it is a great idea, an inspection of the company’s Web site shows that GradeFund currently offers little to students who are in the greatest need, those in inner cities and other underserved areas.

“Right now, 95 percent of the money they raise, they’re going to have to go out and invite people to pledge towards them. What we’re trying to build in the next round is the kindness of strangers and the value of mentors by letting people do more microsponsorship,” says Michael Kopko, co-founder of GradeFund.

At press time, 13,608 people had signed up for GradeFund, most of them students (planning to go to college or in college or graduate school). There are plans to attract sponsors, but those plans are still being developed.

Kopko is also part of a successful business called DormAid, which provides services to college students such as bedding, room cleaning and laundry services. Coming in close contact with many present and future college students has unquestionably exposed Kopko to the very real concern of how they can pay for higher education. He says he’s aware that academics study incentives, but he sees GradeFund in a different context.

“We take more of a revolution, emotional, student-led approach,” he says. “We’re going to help students get excited about this and then see what it does after a year or two of hard work.”

Dr. Eric P. Bettinger, associate professor of education and economics at Stanford University School of Education, notes, “The types of things you need for an incentive program to function are, one, whether or not there is money behind it, and two, helping verify the grades and making the transaction happen.

“If I go out and convince four people to pay me for my performance, I don’t necessarily need a third party to come in and request my transcript,” he says. “They’re going to need a big sponsor to step in at some point to make this work.

“[Presently,] there is nothing inherent in this that’s helping the student set a goal that’s going to be measurable and stretch them further,” adds Bettinger.

GradeFund requires that students raise a minimum of $100 before checks are issued to them. A transaction fee of 5 percent is charged. Kopko says it’s a for-profit company because that allows greater flexibility.

Cornell’s Jackson, who spoke with Kopko prior to GradeFund’s launch, says if the site becomes well known, then it could become a clearinghouse for philanthropists interested in offering incentives.

“We’re beginning to do a whole second layer of functionality additions to the site,” says Kopko. The goal is for sponsors to pledge as little as 5 cents and to not have to designate individual students.

“Right now, as the site currently stands, the onus is more on the student than I think they even realize,” he adds. “That’s because we have limited resources, and we figured the best way to introduce the concept to the world is to build this kind of marathon model of students seeking out close family and friends to pledge toward them.”

Kopko says inner-city kids would be more effectively served under the future sponsorship system to be developed for the site. “It’s an education process that’s going to take a lot of time so that everyone knows about it,” he says. “Our hope is there are always early adopters. It takes typically a few users that have an impact that we can share their stories, and others can realize that for only $10 I can potentially show not only financial support, but send love to 200 students. Sometimes that alone makes the onerous task of pursuing education that much more rewarding and that much more doable.”

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