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After graduation, can the school withhold the degree certificate and diploma because of the loan?
This is reasonable, because when you take out a loan, it is on the contract. Maybe you didn't pay attention when you signed it. Only when all the loans are paid off can the diploma be returned to you. The same is true for finding a job with a copy. For a regular enterprise, you won't be rejected because you got a copy, but you will attract much attention because you are a simple student.

Come on, I wish you an early repayment.