Student-loan forgiveness is "the most regressive policy idea we've seen," said Purdue University President and former Indiana Gov. Mitch Daniels. He was appearing on CNBC's "Squawk Box" Wednesday.

Daniels said debt forgiveness will worsen the inequities it was designed to remedy. "It's a gift to the wealthy. Doctors and lawyers are the two categories who would benefit the most. Only 5% even of the most modest suggestion would go to the bottom quintile."

A University of Chicago study published last year found student-debt cancellation ranging from $10,000 to full forgiveness would redistribute income upward, as nearly half of all the student debt is owed by students pursuing careers in high-income fields, Business Insider observed.

Proponents of loan forgiveness say it could boost the economy, as well as benefit minorities and low-income households. Canceling student debt could also mean current monthly payments could go toward savings or other spending.

President Joe Biden is considering student-debt forgiveness for borrowers who make less than $125,000 a year. Under the policy, about 79% of student-debt borrowers would qualify.

Some Democrats have spoken out against income ceilings, including New York Rep. Alexandria Ocasio-Cortez, who said: "I don't believe in a cutoff, especially for so many of the frontline workers who are drowning in debt and would likely be excluded from relief."

Sen. Susan Collins, R-Maine, previously told Business Insider that loan forgiveness is "not fair" to those who repaid their debt over many years.

Daniels told CNBC: "People in the future will figure they can get off the hook too and will borrow more than they should. That'll push up college costs."