Are you saying that being on the hook for 60% less in interest and fees isn't an improvement? Is a millionaire still stuck in a poverty trap because it's theoretically possible for them to get hit with costs that exceed their savings? What you're describing sounds like a huge improvement, not "still stuck."

Regarding your second paragraph, no, I wouldn't say that. I'm not actually passing any judgment here. I don't think that buying iPhones and fancy TVs is a particularly wise choice for poor people, but I also don't really fault them for it. I'm merely giving an example of something which could help with poverty but which the government can't provide. A decent chunk of poverty comes from poor financial choices, and that's just an observation without implying any judgment towards the affected people.