College Students Invest Real Money In TVA Stock Program

Dr. Kevin Zhao's MTSU business classroom may not look unusual but it's unlike any class you've ever taken. Students like MTSU Senior Austin Venable aren't just trying to earn a grade here they're actually expected to earn a profit with your money. "If we underperform the market that's a bad mark on the school. Ultimately so our goal is to over perform the market," said Venable. The reason students like Venable are investing in real stocks in the first place goes back 15 years. That's when the Tennessee Valley Authority created the TVA Investment Challenge to funnel money from the government power company to college students for investing. Dr. Zhao's class is responsible for a half million dollars of the program's now $12 million in investments. "Students get very strong sense of responsibilities, investment risk and investment disciplines. those are things student can never learn from any textbook," said Zhao. Dr. Zhao's class was pretty profitable last year earning a school record 38% but there have been years when they lost money. Ben Cunningham's Tennessee Tax Revolt group is a watchdog for government spending. He believes the program's concept of gambling with real money is wrong even if it turns a profit. "It's our money and they shouldn't be giving it to college kids to let them experiment when they've had absolutely no experience at all managing money," said Cunningham. TVA Senior Manager Eric Davis says the program goes back to the TVA's lesser known mission of economic development. He believes classes like Dr. Zhao's not only provide a better education for students but is also profitable. Over its 15 year history the program has out earned the SP 500 by 1%. "I like to call it a win win win. It's been a win for TVA rate payers. We've earned a return higher than we would've earned if we passively invested it," said Davis. That extra money will go to resources that help keep rates down as long as students like Venable make good decisions with it. "We have to put a lot more time into it as opposed to playing with fake stocks and fake accounts," said Venable.

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