Tennessee House Bill HB1338

Tennessee 2023-2024 Regular Session

• Introduced: 1/31/23
• Refer: 2/2/23

Caption

AN ACT to amend Tennessee Code Annotated, Title 49, Chapter 4, relative to financial aid.

Impact

The implications of HB1338 are significant for educational finance within the state of Tennessee. By defining the conditions under which scholarship loans operate and eliminating interest-bearing obligations, the bill could enhance access to education funding for students. This reform is anticipated to relieve some financial strain on students, making it easier for them to pursue their educational goals without the additional burden of accruing interest on loans.

Summary

House Bill 1338 seeks to amend existing provisions in the Tennessee Code Annotated related to financial aid, specifically addressing scholarship loans. The bill proposes replacing subdivision (2) of Section 49-4-706(b), focusing on how these scholarship loans are structured and administered. Under the new provisions, all scholarship loans issued must be documented through notes payable to the Tennessee Student Assistance Corporation (TSAC) and notably must not bear interest. This change aims to streamline the process and clarify the terms under which scholarship loans are provided to students.

Contention

While the intent behind HB1338 is to simplify and improve financial aid processes, debates may arise regarding the overall impact on funding availability and institutional resources. Critics might question whether eliminating interest on scholarship loans will affect the financial sustainability of the scholarship programs. Additionally, there may be concerns over any potential administrative impacts at TSAC in handling the anticipated increase in scholarship loan applications without interest provisions, which could lead to discussions about balancing student needs with institutional capacities.