(a) As used in this section, “college system of Tennessee” means the community colleges and colleges of applied technology governed by the board of regents.

(b) As used in this section, “state universities” means:

(1) The University of Tennessee and all its several branches;

(2) The University of Memphis;

(3) Tennessee State University;

(4) Austin Peay State University;

(5) Middle Tennessee State University;

(6) Tennessee Technological University; and

(7) East Tennessee State University.

(c) The state universities and the college system of Tennessee are authorized to issue diplomas, certificates of credit, or official transcripts only after the student involved has satisfied all debts or obligations owed to the college or university, including, but not limited to, its bookstores, libraries, food service centers, dormitories, infirmaries, or hospitals. The limitation of this subsection (c) shall not apply to debts of less than one hundred dollars ($100).

(d) The limitation in subsection (c) does not apply to debts or obligations evidenced by notes or other written contracts providing for future payment, such as, but not limited to, loans authorized under federal or state education or student assistance acts.

(e) Notwithstanding the limitation in subsection (c), the colleges in the college system of Tennessee shall issue a certificate of credit or official transcript for a student seeking admission to any college in that system if the student has entered a written agreement to satisfy the outstanding debt or obligation owed to the college issuing the certificate of credit or official transcript. Any certificate of credit or official transcript issued under this subsection (e) shall indicate that it is subject to an outstanding debt owed to the issuing college. The college receiving a certificate of credit or official transcript issued under this subsection (e) shall not subsequently issue a diploma, certificate of credit, or official transcript to that student until it receives proof that the student has satisfied the outstanding debt to the college that issued the certificate of credit or official transcript.