The money for the Tuition Incentive Program comes from federal money appropriated in the American Recovery and Reinvestment Act. Kansas received $39.9 million for higher education. The Kansas Board of Regents decided two-thirds would go toward deferred maintenance projects while the other third, $13.3 million, would go toward aid for tuition.
I think one may say, without fear of contradiction, that this is a somewhat questionable use of federal stimulus money. The $5 per credit check will have a pretty limited effect on the American economy outside of, well, Fort Hays, Kansas. The student body president, however, says he will try to publicize the $5 program as an incentive to get students to study hard at finals.
A full-time student usually takes around 15 credits per semester. So someone at Fort Hays who earned a C or better in every class would get a check for about $75. Tuition at the school is $1881 a semester.