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US default could hamper colleges’ financial aid and research funding, ACE says

Federal policymakers have negotiated for weeks over raising the debt ceiling, with Republicans insisting Democrats agree to spending cuts to secure their cooperation. However, given the likely catastrophic economic consequences of a government default, lawmakers on both sides of the aisle have committed to finding a way to raise the debt limit.

Essentially, the federal debt ceiling is akin to a credit card limit, and the government must pay on its debts before it can borrow more, ACE explained in its memo. As of now, the federal government is on track to trigger a default sometime in the first two weeks of June, the organization said.

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