None of the above:
1. You don't say which kind of GIC John has: U.S. Guaranteed Investment Contracts can be for fixed or floating rates;
http://en.wikipedia.org/wiki/Guaranteed_Investment_ContractCanadian Guaranteed Investment Certificates are fixed rate instruments.
http://en.wikipedia.org/wiki/Guaranteed_Investment_CertificateClearly, the implications of unanticipated inflation are different. For holders of a fixed yield asset unexpected inflation represents a loss; for holders of a floating rate asset, it doesn't/
2. Inflation refers to an increase in the _general_ price level. It is not the case that all prices increase at the same rate. Unless one knows what happened to the prices of the goods that John intends to buy, we know little of the effects of inflation on his ability to buy those goods and hence the affect on his earnings. (Note, BTW, that if John is still a student, then his purchases are not at all like the basket of goods used to compute the inflation rate.)
3. You don't say how long John has to pay off his student loans. If the student loans are fixed rate, and John can expect to get a corresponding 10% increase in his next summer's income, then the effective cost of paying back the loan has gone down. Of course, this does not apply if the loan comes due before then.
I think the desired answer is (c) - John benefits from the reduced cost of paying back the loan but loses on the value of his summer income and his GIC, leaving him with a net gain. But in reality, the question is just so awful that even if it is the desired answer, it isn't the right answer.
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