TOPICS > Education

Schools Start Offering Students Cash for Better Grades

August 11, 2008 at 6:35 PM EDT
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Some schools across the country have launched new cash reward programs to improve students' test scores, despite concerns from some educators over what role money should lplay in children's motivation. John Tulenko of Learning Matters Television reports on the debate.

GWEN IFILL: Now, a new way to raise test scores: by offering cash rewards for students who perform well. John Tulenko of Learning Matters Television, which produces education stories for the NewsHour, has our report.

JOHN TULENKO, Learning Matters: To gear up for this year’s state test, South Lawn Elementary in Coshocton, Ohio, threw a pep rally. But this school had something more to excite students.

RALLY SPEAKER: We want the fourth-graders and the sixth-graders to remember that they have the opportunity to break the bank this year.

JOHN TULENKO: Students who do well on the upcoming state tests will get more than high scores. They’ll get cash.

How much money did you get?

STUDENT: A hundred dollars.

STUDENT: A hundred dollars.


STUDENT: I got like $85.

STUDENT: I got $100.

JOHN TULENKO: Do you like it?

STUDENT: Of course.

JOHN TULENKO: Coshocton, a factory town in Appalachia, uses the promise of money to motivate students to do better on state tests.

The idea has caught on in other places around the nation. New York City and Baltimore just launched pilot programs. And this fall, Exxon Corporation will pay students at 67 high schools in six states $100 for passing advanced placement exams.

TEACHER: The last time we talked, we talked about the Taj Mahal.

JOHN TULENKO: Coshocton’s cash incentive program started in 2004. Inspired by a similar program in Africa, a local businessman put up $100,000 to pay for it. That was incentive enough for this cash-strapped city.

Students get paid for studying

ERIC BETTINGER, Stanford University: Here's a district that's willing to try new programs. In many ways, the nation is looking at this small community.

Just to give you some information on Coshocton...

JOHN TULENKO: Stanford University Professor Eric Bettinger helped design the cash reward program and has evaluated its effects.

ERIC BETTINGER: So much of our society now is based on incentives. What we're experimenting with here is, what's something that we can do that just costs us a little bit, but hopefully gives us a bang for the buck?

JOHN TULENKO: Coshocton selected half the students in third through sixth grades to participate in the program. Students could earn $20 for each subject test they passed, up to a total of $100 paid over the summer.

Did you ever expect that you'd be in a school that pays children?

FRANCIS BERG, Principal: No. No. That's a fast no. No, I never -- I didn't know we'd go this direction.

JOHN TULENKO: But South Lawn Elementary Principal Frances Berg quickly saw a place for cash incentives in school.

FRANCIS BERG: It's hard to say to a child in third, or fourth, or fifth grade, "But you have to do this, and you have to learn this, and I want you to know this, because you have to get a good job."

Well, getting a good job is the furthest thing from their mind. "Well, if you get a good job, then you'll make good money, and you can have a house." Well, this means nothing to them. But being able to give them a little paycheck, a little bit of money now, saying, "See, we told you, you know, you do really well, the money comes."

JOHN TULENKO: Knowing that you could get a prize, how did it change you?

GINA DODD, Fourth Grader: It kind of makes you want to, like, get to bed early and study hard. And...

STUDENT: You start studying more for your test. And you want to remember all the things that you learned so you could pass the test and get more money.

FRANCIS BERG: The kids are aware of it. And some of the kids are almost in a bragging type thing, "Well, yep, I think I'm going to get the whole $100, and then this is what I'm going to do with it."

Concerns about cash rewards

JOHN TULENKO: Coshocton has been at this for four years. So what are the results?

FRANCIS BERG: I've seen good scores.

JOHN TULENKO: Before cash prizes, most students at South Lawn Elementary were failing the state test. Today, South Lawn's been recognized as a high achieving school of promise. So far, so good. But dig deeper and the notion of paying students to learn quickly gets complicated.

For one thing, research on incentives warns that prizes may interfere with learning for learning's sake.

Was the money the thing that motivated you most?

STUDENT: Yes. Really, it was...

STUDENT: Sort of.

STUDENT: Well, how can I put this? It's basically like we get rewarded for doing good in school, but just the thought of having money as doing good on your test, it motivates you more.

STUDENT: And our mind started functioning more because we know we're actually getting something in return.

TIM MEISER, Teacher: I hope he's getting a lot more out of school than the money that he's getting in the summer, so I hope he's getting more out of it.

JOHN TULENKO: From the start, South Lawn teachers were reluctant to talk to students about the money.

TIM WARD, Teacher: I don't bring it up, and I don't stress it, because I want them to do it for themselves, period.

TIM MEISER: It's more about me trying my best, giving my best effort.

TIM WARD: Somewhere down the line, they need to be a good person and do things out of the goodness of their heart. It's not about the money.

JOHN TULENKO: Teachers had other concerns about cash rewards.

BETH SCHOTT, Teacher: I was hesitant. Would it cause some friction in the classroom? "Well, I got $50, and you only got $25. I'm smarter than you," that type of thing.

TIM WARD: I thought it would put too much pressure on the kids to actually perform because some kids would fold under that pressure.

STUDENT: We was probably so excited about the money, so the day before the test we wouldn't actually get to sleep, we'd stay up all night thinking about it. A hundred dollars, since we were little then, it meant like thousands to us.

JOHN TULENKO: And when some students took the money home, more problems.

TIM WARD: Their parents took the money. Then, that kid resents the fact that, "You know, I worked really hard to get this. Now it's just taken away from me."

Placing teachers at a disadvantage

JOHN TULENKO: Some concerns about cash prizes focused on teachers. They're already paid to motivate students.

I want to play devil's advocate. Maybe the reason that they're not motivated is you all have failed as teachers.

TIM WARD: That could be a possibility. It's always in the back of your mind.

BETH SCHOTT: That weighs on my heart heavy all the time, because I try to do the best I can. These are my kids, and it's not easy. And I can't say that, you know, it doesn't take -- it doesn't take too many bad teachers to turn a child off.

JOHN TULENKO: But circumstances here may put teachers, good or bad, at a disadvantage. In Ohio, most of the money for schools comes from local property taxes, which means that distressed towns like Coshocton have significantly fewer resources.

The impact obvious at South Lawn Elementary. It has no science lab, and the technology is outdated. The music teacher, the art teacher, and even the principal work part-time. Cash rewards don't address this lack of basic resources.

If Coshocton had more resources, do you think students might be more motivated?

ERIC BETTINGER: That's a hard question, in part because I don't know the kids well enough here. And certainly, if they had better facilities, better teachers, there might be more opportunities for them, and something might resonate with them, and you might be able to get that "aha" experience for many children that get them really engaged in school and get them moving forward.

Students' performance erodes

ERIC BETTINGER: On the other hand, here's a program where we're trying to see, "Look, if we put a little bit of money in, can we get a big bang?"

JOHN TULENKO: While test scores here have gone up, to prove a big bang, paid students needed to show better results. Again, only half the students each year could participate in the cash program.

So what were the results?

ERIC BETTINGER: We find big effects in math. We're basically finding that math scores across the district have gone up.

JOHN TULENKO: What about social studies, reading, and science?

ERIC BETTINGER: Nothing. In reading, we don't find any effect whatsoever.

JOHN TULENKO: But there was a startling affect once the offer of money was withdrawn. Last year, these students were selected for the program. This year, they were not.

Do you guys miss the money?

STUDENT: Yes, kind of.


STUDENT: Our grades started dropping after they told us we didn't get the money. And then I went home that night with my report card, and my mom's like, "You need to bring your grades up."

JOHN TULENKO: Data revealed that, once students were no longer eligible for cash prizes, their reading scores dropped.

ERIC BETTINGER: If that's what the incentives does, is that it somehow erodes the student's ability to perform, then we're worried about that. So it's one of the things we're monitoring. And if needs be, there will be a change in the program as a result of that.

JOHN TULENKO: One change has already been made. After test scores revealed that students being paid failed to do better than students getting no prize at all, officials put a stop to cash rewards in reading, social studies, and science.

This summer, Coshocton will decide whether to continue paying students in math and writing.

GWEN IFILL: There's more about the cash incentive program on our Web site, including a profile of a 12-year-old having trouble in school. You'll find it at