The debt deal reached by Congress and the White House in 2019 will hurt student loan borrowers in a number of ways. First, the deal eliminates subsidized loans for undergraduate students, which means that interest will begin accruing as soon as the loan is disbursed, rather than after graduation. This will increase the cost of borrowing for students and make it more difficult for low-income students to afford college.
Second, the deal eliminates the Public Service Loan Forgiveness program, which forgives the remaining balance of federal student loans for borrowers who work in certain public service jobs for 10 years. This will make it harder for borrowers to pursue careers in public service and will increase their overall debt burden.
Finally, the deal makes it more difficult for borrowers to discharge their student loans in bankruptcy. Under the new rules, borrowers will have to prove “undue hardship” to discharge their loans, which is a higher standard than other types of debt. This will make it harder for borrowers who are struggling to repay their loans to get a fresh start. Overall, the debt deal will have a negative impact on student loan borrowers and make it harder for them to achieve financial stability.
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