This is part of the America's Future series airing on FOX News Channel, looking at the challenges facing the country in the 21st century.

NEW YORK — Some New York City school teachers will be taking home a bonus check this year thanks to a new program rewarding them with schoolwide bonuses when their students perform well.

The controversial plan, which won the approval of the local teachers union, could be a model for school districts across the country. Currently about 160 New York City schools in poor neighborhoods are taking part in the privately funded program.

The New York City plan is unique because unlike other merit pay programs which offer cash rewards to individual teachers, it awards bonuses to an entire school where student test scores improve. A school compensation committee comprised of teachers and administrators decides how to divvy up the cash.

At Middle School 331 in the Bronx, which met partial student test goals, social studies teacher Dillon Prime, who earns about $48,000 a year, will receive an extra $2,000. Dillon says he plans on using the cash to help pay off his graduate school loans.

"It’s very significant to earn this money," he said. "It’s going to make this year a lot smoother.”

New York City officials say about 40 percent of schools taking part in the merit pay program met their targets and that those schools will be awarded $3,000 per staffer.

New York City Schools Chancellor Joel Klein, who implemented the merit pay plan, says it encourages teacher cooperation rather than competition.

"Teachers will actually help and support each other because they realize it depends on how they do collectively not individually,” he said.

But awarding individual teachers merit pay based on student test scores has often met with resistance from educators and teachers unions across the country.

The nation's largest teacher union, the National Education Association — which in the past rejected merit pay — doesn’t think the New York City approach is a significant improvement.

"Pay for test scores is not good public policy,” NEA spokesman Bill Raabe said.

While the NEA wants teacher pay linked to experience and level of training, presidential candidates Barack Obama and John McCain both support teacher merit pay.

Prime is optimistic about the future of the program.

“I definitely think it will be a success,” he told FOX News. “I do think scores will improve here.”