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Rewarding Students with Money for Good Grades Not Very Effective

Rewarding Students with Money for Good Grades Not Very EffectiveGiving students money for doing well in school yields only modest results, according to a new study by the University of Toronto and the Massachusetts Institute of Technology.  The research goal was to find out whether or not financial rewards could be a successful motivation for improving grades.

For the study, first and second-year students who were receiving financial aid at the University of Toronto Scarborough were invited to apply for the program. Volunteers were then chosen by lottery and given money for keeping their academic grades above 70 per cent.

For each course taken, volunteers were given $100 for having an average of 70 percent, and then an additional $20 for each percentage point above 70 percent.  Participants were also offered free access to student advising services to discuss academics or campus life issues.

Before the research began, most volunteers said they believed the program would be a good incentive for raising their grades. Furthermore, well over half reported being very concerned about having enough money to finish their degree.

The final results, however, reveal that the money created just a modest boost in academic achievement, and resulted in very few positive effects for the following year, once the incentive was over. The researchers add, however, that the positive effects were greater for those participants who better understood how the incentive program worked.

Although the incentive study turned out to be quite popular with students and both sign-up rates and participation were high, the relatively small impact it had on boosting grades is consistent with other studies involving these kinds of interventions.

The researchers describe monetary incentives as “an expensive approach for trying to generate modest effects on retention and performance.” They recognize that other incentive programs, such as giving higher amounts of money or even giving rewards for improving grades that are lower than 70 percent, might lead to greater results.

Ineffective study habits, the authors believe, may be hindering scholastic achievement and the real problem could be inefficient academic preparation instead of a lack of effort or drive. They add that having the open student advising did not help very much. They suggest that other possible ways for improving academic performance, or perhaps alternative teaching methods, are what is needed in high school and postsecondary institutions.

Source:  University of Toronto

Rewarding Students with Money for Good Grades Not Very Effective

Traci Pedersen

Traci Pedersen is a professional writer with over a decade of experience. Her work consists of writing for both print and online publishers in a variety of genres including science chapter books, college and career articles, and elementary school curriculum.

APA Reference
Pedersen, T. (2018). Rewarding Students with Money for Good Grades Not Very Effective. Psych Central. Retrieved on December 3, 2020, from
Scientifically Reviewed
Last updated: 8 Aug 2018 (Originally: 25 Nov 2010)
Last reviewed: By a member of our scientific advisory board on 8 Aug 2018
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