They argue that wide-scale student loan cancellation will help millions of student loan borrowers buy a home, start a family, save for retirement, and break free from the shackles of high-interest debt. Simply put, supporters of student loan cancellation say that cancelling debt, by definition, puts more money in people’s pockets, which will stimulate the economy.
This goes with what I said previously about saving v.s. spending your cash when you have little to save or spend. The argument of "they wont spend money" is because it is being put towards something bigger such as a house or retirement. It all goes back to the economy at some point.