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I think students would definitely be more motivated to commit to their school work if they were driven by monetary rewards - is this wholly a positive thing? I'm not sure.

I had a few immediate thoughts:
-There is not a national grading plane. Schools, programs, and professors all grade differently. Could this jeopardize the merit of the system?
-In many programs, the grades are not always the main quantifier of how well the student is doing, or what the student truly deserves. Sometimes the value of what the student truly takes away trumps the letter grade.
-Would students choose certain class specifically because they know the professor is prone to giving higher grades? Could affect the integrity of the student, program, and course.

I think money is a strong motivator. And I think money drives results in many cases. But I am not sure driving students to succeed for monetary rewards is a long term positive action plan. However, this is simply my personal opinion, and I do think the system you have created has merit and is interesting. I wish you the best!