Financial rewards for good grades have modest effects, study finds

November 19, 2010

A new study commissioned by the Higher Education Quality Council of Ontario observes that offering students cash in an effort to improve their marks in college or university may be more expensive than it is effective. The study involved first- and second-year students receiving financial aid in 2008-09 at the University of Toronto Scarborough. For each one-semester course, participants received $100 for obtaining a grade average of 70%, and $20 for each percentage point above a 70% grade. The findings show the financial incentives had a modest positive effect on grades, and had very small positive effects in the subsequent year, after the rewards ended. However, the researchers note, the effects were stronger for those students who had a better understanding of how the financial reward program worked. HEQCO News Release | Read the report