I think it’s better than continuing to exploit the underprivileged. The persons who were either in one of the categories: uneducated, unfortunate, desperate, deluded/ill, or whatever it may be to how they didn’t have the variables & events needed to succeed compared to the ones that did. Add a forgiveness plan with some financial health classes and the community health will improve or the system is inherently socially poor and needs to adapt for persons who are destined to fail with the system that favors others unfairly.
Good intentions don't save bad policy from causing really bad effects. Venezuela was going to help the poor. Really, that was the intent. They wound up with the poor losing 15 pounds each because they can't get enough food. How did they get there? Well, there wasn't enough money to pay for all the things that the government wanted to do for the poor, so they printed more money. Then the next year, there still wasn't enough money, and prices had gone up, so they printed more money. And they wound up at runaway inflation. It's a real danger, to be taken seriously. Merely saying "it's better than the alternative" does not in fact make it better than the status quo, even for the underprivileged.
But there are two things that might prevent this idea from winding up at hyperinflation. First, it is a one-off. The government prints money to pay off everyone's debt. Now nobody has debt, so the government doesn't need to do it again. Except that having no debt didn't give me enough money to buy a house, so I still have to take out a mortgage, and behold, I'm in debt again. And it didn't give my kid enough money to pay for college, so she's in debt again. And now there's cries for the government to do it again. And if they keep doing it, then we're probably going to wind up in hyperinflation. (Especially because of incentives. If the government paid off all debts, and I think they're going to do it again, my incentive is to borrow as much as I can to buy anything I think I want, because to me, it will be free.)
The second way this might not wind up in hyperinflation is because of deleveraging. A bank has $100 on deposit. They lend out $90 (fractional reserve banking), and now $190 exists, but someone owes $90, so the net is still $100. Now the government prints $90 and pays off the bank. Now $190 exists, which is no change, but the net is now $190 instead of $100, which is a change. Is that inflationary or not? I don't know.