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Raise.me provides 'micro-grants' for good students, helps them fund college

If students got paid for getting an "A", would that be enough incentive to push them from high school achievement to college success?

That's the idea behind Raise.me, a for-profit startup, lets high school students earn small tuition grants from colleges to help pay for their higher education.

"Students are earning as much as $80,000 towards college on the platform," Raise.me co-founder and CEO Preston Silverman, told CNBC's "On The Money" in an interview.

"It can be anything from getting good grades in their classes, to taking on leadership roles in clubs or sports," Silverman said.

About 700,000 students from all 50 states are using the platform, and have earned $1 billion in financial aid from colleges partnered with Raise.me. Students accrue these "micro-scholarships", adding more cash amounts for additional achievements.

The average award is $22,500, earned from Raise.me's more than 225 partner institutions. In order to access the money, students must apply, be accepted, and enroll in the particular institution awarding the money.

The roster of affiliated institutions is impressive: Just a few of include University of Chicago, Carnegie Mellon, University of Pennsylvania, Tulane, and Loyola Marymount University.

Meanwhile, different colleges offer different amounts for the same achievement. For example, one may offer $50 for an "A", while another school will give $300.

So is it wrong to pay for high academic achievement? Absolutely not, Silverman argued.

"There's a great body of research that shows that performance-based aid, which essentially is what Raise.me is, not only increases academic outcomes over time, but it also doesn't do anything to diminish a student's intrinsic motivation towards learning," he added.

While the site is free for students, colleges and universities pay Raise.me an annual fee to participate. Because students can join Raise.me as early as the 9th grade, Silverman said the site gives schools a head start on reaching future prospective students.

"Raise.me gives them the opportunity to start engaging students earlier in high school so they can build a relationship and let students know about them before they've solidified their decisions about whether or where to apply to college," Silverman added.

Plus, he added, "many schools are looking to increase diversity on campus. We have a very diverse population of students we're serving."

Raise.me says 40 percent of its student users are low income, and 45 percent are first-generation college-goers.

However, what if the student decides not to attend one of the member colleges? where does the micro-scholarship money go?

"If they don't end up using the scholarships that they've earned, that money goes back in the pool for other students," Silverman added.

Clarification: Students

On the Money airs on CNBC Saturday at 5:30 am ET, or check listings for air times in local markets.