Is it possible to have student loans discharged under hardship?

Answer

A:

In India, student loans are not easily discharged under financial hardship, unlike some provisions available in other countries like the U.S. However, in rare and specific situations, banks may consider restructuring, moratoriums, or partial relief, but complete loan waiver or discharge is not common.

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 Here's What You Need to Know:

 1. No Automatic Hardship Discharge

There is no legal provision in India that allows you to have a student loan wiped out solely due to financial hardship.

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 2. Loan Restructuring or Moratorium Is Possible

You may request the bank for:

• Extension of the repayment period

• Temporary moratorium on EMIs

• Interest-only payments for a limited time

This is subject to:

• Your financial documents

• Job status or unemployment proof

• Bank’s internal policies

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 3. Relief Under RBI Guidelines (In Special Cases)

In extreme situations (like natural disasters, death, or permanent disability), banks may:

• Restructure the loan

• Offer partial write-off (especially for education loans under government-backed schemes)

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 4. Government Subsidy Schemes (No Waiver)

• CSIS (Central Sector Interest Subsidy Scheme) for economically weaker sections: Pays interest during the moratorium (study period + 1 year).

• No complete loan forgiveness, but helps reduce burden temporarily.

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 5. Legal Remedy for Default

If the student or co-borrower (usually parents) fail to repay:

• Banks may initiate recovery proceedings.

• It can impact credit score and future borrowings.

• You won’t go to jail, but civil recovery action may be taken.

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 What You Can Do:

• Talk to your lender: Explain your financial situation.

• Request restructuring or deferment in writing.

• Explore job assistance and skill programs that help improve your repayment capacity.

• Seek legal advice before defaulting to avoid long-term credit damage.

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Need Help With Student Loan Disputes or Restructuring?

Call: +91 9625961599
Visit: www.legals365.com

Connect with Advocate B.K. Singh and his team for expert legal assistance on education loan issues and bank negotiations.

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