Ross Rospigliosi, principal of Plymouth College, made the one-off payment to lure students in on the first day of their summer break when junior health minister Baroness Cumberlege visited.
Mr Rospigliosi had invited the Baroness 15 months before but his request was ignored until a week before the end of term when he was told she would visit on the first day of the summer holiday.
Desperate to ensure that the college appeared thriving, Mr Rospigliosi paid 21 students to turn up.
"When we ask students to do things outside of the timetable we are prepared to pay them for their services," he said.
"I didn't ask the Baroness to pay for the biscuits she ate at teatime so why should I expect the students to come in for nothing?" He explained that often students are usually offered college sweatshirts for their efforts not cash, and it helped give the college free publicity.
"The sweatshirts are worth Pounds 15 each, but we're a bit low on them at the moment," he added.