distortions in the market, and this round of forgiveness (+ future rounds) would only perpetuate those issues.

The market for higher education is competitive, yet the institutions don't seem to compete on price directly (but rather below the line with financial aid). It is one of the few industries where cost structure and pricing just don't seem to matter all that much (though they clearly do on the edge, and it can become the basis of decision-making when weighing different types of alternatives).

Without the subsidies, this would cease to be true in many instances (though other capital flows and endowments create distortions of their own...).