Imagine if researchers said: We're working on a cure for cancer, and in the process we've generated a bunch of unobtanium. We can use it as a one-time cure for a bunch of current cancer patients, or we can use it to continue further research towards a permanent, universally-available cure. Obviously, if we use it all up now, we'll be back to square one and have to start generating it again before we can work on a long-term cure. Which would you pick?
"Unobtanium" is political will. If we just do a round of bailouts for current loan-holders instead of addressing the root cause of spiraling education costs, we're just kicking the can down the road. The pressure will be off, a whole generation of 20- and 30-somethings will lose interest in the issue, and it'll fall off the political radar for another few decades, by which time GenZ+ will be well and truly fucked, since educational costs are only going up and up.
The absolute worst way to address rising education costs is to encourage a bunch of students to take ridiculously large loans and then wipe them off the books. That means: 1) schools can raise prices to the roof because they know students have access to mountains of cash from loans, and 2) students won't hesitate to take the loans because they'll probably just be forgiven eventually. Probably. Maybe. Or maybe it'll be a millstone around their neck for the rest of their lives...but hey, what choice do they have, that's just what school costs (because governments make sure students have all the money they need for a bidding war to get in).
So it amounts to just transferring huge piles of taxpayer money directly to overpriced schools and predatory banks, with no plan to stem the flow. It's like trying to help your drug-addicted friend recover with a one-time gift of a brick of heroin. They'll feel great for a while, and they'll love you for it while it lasts, but it's only going to make the problem much worse in the long run.