Student affairs experts have said  that gambling is an unhealthy habit among college students, especially in the age of online poker. But what about if instead of a virtual hands, the students were betting on their ability to meet or exceed a certain grade?
One company, called Ultrinsic, is offering students to chance to do just that. And it is arguing that such wager-making will be a healthful tool for students who might require an extra nudge to hit the books. But some in higher ed think the venture, whose sustainability depends on more students failing to reach their goals than succeeding, could create unintended ill effects and ultimately harm more students than it helps.
Ultrinsic , which is one year old and still in its beta phase, invites students to make bets on whether they can make or exceed a certain grade in a course. As a prerequisite, the company has non-freshmen fill out a list of courses they have taken since arriving at college and their corresponding grades (first-year students are treated equally in terms of assumed skill). Ultrinsic then uses a formula — taking into account that history (which it checks against an official transcript before any payout) along with other factors including any available data on grade distribution for various departments, courses, and professors — to calculate the odds that the student will be able to earn his expected grade. (There is a demo  available on the company’s website.)
If a student makes the grade, Ultrinsic pays him according to the calculated handicap; if not, the student pays the company. The rub is that, as in most gambling arrangements, while students can certainly beat the house on a case-to-case basis, the formula is designed so that Ultrinsic wins more, on balance, than the students do (although one user's comments to the Associated Press  suggest the formula might not be foolproof).
The company last year piloted its service at New York University and the University of Pennsylvania, drawing about 600 students in all. It has plans to expand to 34 new campuses this fall, including other high-profile institutions such as Princeton University, Duke University, and Stanford University. The universities are not involved in the deployment, though Ultrinsic says it welcomes offers of collaboration.
The proliferation of such a service strikes Kevin Kruger, associate director of the Student Affairs Administrators in Higher Education, as ominous. “The concern I have is that academic success and grades are serious endeavors — an important part of college experience,” Kruger says. "Certainly, for many students, the pursuit of good grades is not always incidental to the pursuit of knowledge,” he says, but turning it into a betting game “seems a little antithetical to the spirit of the academic mission.”
Ultrinsic nevertheless feels no need to dodge professors or administrators on these campuses, says co-founder and president Jeremy Gelbart, because it is confident in its argument that the betting system will improve student performance by creating incentives to do better. “The administrators and professors we’ve spoken to so far have for the most part said, ‘If this is going to help out my students and help them have a better college experience, I’m all for it,’ ” Gelbart says.
Insofar as universities are doing their jobs to combat the existing hazards of grade-based assessments — such as cheating, grade-grubbing and bribery — Ultrinsic should prompt student bettors to do more work, which should improve learning, he says.
Alexander C. McCormick, director of the National Survey for Student Engagement, calls that a “cop-out.” True, Ultrinsic would not be inventing grade-grubbing, McCormick says, but it would likely exacerbate the problem of letter-grade obsession that already exists — possibly pushing some professors to give up on resisting grade inflation in the face of more and more nagging.
Likewise, increasing the import of the letter grade might deal a blow to the battle against cheating, McCormick says. “Students who are determined to be academically dishonest can find out all sort of creative ways to do it,” he says. “This might create even more incentive to figure out how to cheat the system.”
There are studies that suggest using cash incentives can inspire students to get better grades. At the K-12 level, Harvard University economist Roland Fryer has experimented with the idea in several major public-school systems, with promising results in some trials. Eric Bettinger, an associate professor of economics and education at Stanford, several years ago found that paying third- through sixth-graders to score well on standardized tests had a positive effect on grades similar to that of reducing class size. At the higher ed level, the research group MDRC is currently studying the effects of performance-based scholarships — where money is paid directly to students in increments if their grades are up to snuff at checkpoints throughout the year — on achievement at two- and four-year colleges in several states. The group plans to announce its findings next year.
But while using cash rewards to encourage higher achievement might be a legitimate experiment, it is one better left in the hands of colleges than entrepreneurs, says Bridget Terry Long, a professor of economics and education at the Harvard Graduate School of Education. It is not that placing wagers won’t prompt students to pursue better grades, Long says; it is that Ultrinsic’s business model depends on its ability to tempt students into making irrationally optimistic bets, since it needs the majority of wagers to fail.
This is what distinguishes an Ultrinsic bet from a tuition payment: Through selective admissions, colleges are meant to take money only from students they believe are likely to succeed. (An earlier version misattributed this point to Long.)
“The idea is interesting, there is certainly a need to figure out how to improve achievement, but you really need to be careful when designing incentives to avoid these unintended consequences,” says Long, noting the demoralizing effect losing bets to Ultrinsic might have on some students.
Ultrinsic insists that its model has been welcomed by a number of academics, although Gelbart would not disclose the names of the company’s purported champions for privacy reasons, and attempts to get any to contact Inside Higher Ed on short notice were apparently unsuccessful. As for the institutions where Ultrinsic operated last year, a University of Pennsylvania spokesman said the university has not done anything in reaction to the company and declined further comment. A New York University spokesman could not be reached.
As Ultrinsic begins advertising on more campuses, it might simply be let alone, as it has been at Pennsylvania, and evidently in New York. But in terms of winning more endorsements than criticism from academe, McCormick says, “I would not make that bet.”
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