Freshmen at Manley High School were the first to be rewarded Thursday.
Chicago Public Schools Chief Executive Officer Arne Duncan announced the program last month.
Students are measured every five weeks in math, English, social studies, and science.
An average grade of "C" earns students $20, a "B" pulls in $35, and an "A" is worth $50.
A Harvard economics professor developed the privately funded grade-incentive program called "The Paper Project."
Critics say it amounts to nothing but bribery. Mr. Duncan argues the program rewards hard work.
