I heard about this story on Leno then saw it on Drudge. I think the only problem is it is not progressive enough. What about poor students who can't afford to buy better grades. I think it should be changed. Here is what I would propose:
1. Students from households below the poverty line automatically get a one letter grade bump.
2.Students from households above the poverty line must pay $20 to prevent their grade from dropping one letter grade. Paying an additional $20 will increase their grade by one letter grade.
3. Students from households earning more than $100k a year must pay an additional $20 to raise a poor students grade before they can pay to have their own grade raised.
Problem solved and best of all it is a life lesson in how the world really functions.