To answer your question, they won’t spend the money because they never intended to pay off the loan in the first place.
They aren’t getting a 10k check so much as being told they don’t owe 10k, something they never figured they would ever truly owe.
You are right.
What I meant was if someone is in debt up their necks, if the debt were suddenly gone they would not have to pay most of their available monthly income on the monthly payments.
Then something else could be the place for the spending.
I heard that a Japanese term for money after bills is discretionary income. In US it is “disposable income” and we set out to dispose of it as fast as we can.
You’re right, of course, that no one will hand them the $10,000.
I heard more than one call-in show parent say they worked overtime or 2nd jobs to make the monthly debt payments for their kids’ college. Now enraged they were suckers.