Well, it would/will. It would be no different than if the government wrote everyone massive stimulus checks and those with student loans used said checks to pay them down.

You'd see a huge spike in demand for various things as people would have more money to spend. That said I know a lot of people who were railroaded into college as 17 year old children before they even knew how credit cards worked, got a useless degree because they had no direction, and by the time they wised up were up to their eyeballs in debt and unable to get a well-paying job to pay it down.

I'm hesitant to pile even more inflation on top of what we have already, but if I could wave a magic wand I'd want to forgive a lot of those debts as matter of justice. They were mostly kids who were given false promises by every person and every institution they ever trusted up to 17 years old, and then told to make a decision based on said information that ended up saddling them with a lifetime of irrevocable debt. Society at large should take responsibility for that misguidance.