This acts as an "employment benefit" for the government, like health insurance, paid vacation, and free lunch. Whether or not it's better than just paying people more is debatable - but you can say the same things about health insurance, paid vacation, and free lunch.

It's a little more complicated than employer-sponsored lunch because it applies to a variety of employers, not just the US government. And it targets a particular demographic (recent college graduates). But fundamentally it's (supposed to be) one more thing that humans factor into the decision of what sort of career to take.

There are reasonable arguments for and against the program, but soundbites like "they get to pay their debts like anyone else" do not really add to the conversation constructively.