Student loans have long been plaguing New Yorkers, keeping many from prospering financially for decades.

Now, there is some hope: the Biden administration announced that would provide families with “breathing room” with a three-part plan to forgive at least $10,000 in student loan debt to eligible Americans (those earning less than $125,000). Pell Grant recipients could see up to $20,000 forgiven.

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The administration cited the skyrocketing cost of private and public four-year colleges (which have tripled since 1980) after inflation and a lack of federal support as reasons for its intervention.

“Pell Grants once covered nearly 80 percent of the cost of a four-year public college degree for students from working families, but now they only cover a third,” the White House states. “That has left many students from low- and middle-income families with no choice but to borrow if they want to get a degree. According to an analysis by the Department of Education, the typical college student with loans now graduates with almost $25,000 in debt.”

According to a 2021 New York City Report, about 1 in 5 New Yorkers (19%) had higher education debt and 1 in 6 (16%) had student loan debt. These student loan holders are more likely to be black, under the age of 45, experiencing material hardship, and more highly educated.

More than half of student loan holders in New York City owed more than $20,000.

With $10,000 in student loan debt canceled, there is some relief New Yorkers can see, but given the high cost of rent and living here, it doesn’t seem to go as far as it would elsewhere.

That said, most New Yorkers could afford a few months’ rent with the $10,000 they’ll save by not paying off student loans. Last month we reported that the average cost of rent in New York City reached $5,058 per month and today we report that the average monthly rent reached $3,930 (a record).

What else could New Yorkers get with the $10,000 freed up?

  • One year and eight months of groceries. smartasset.com says that groceries in New York City generally cost around $486.71 per month, per person.
  • Three years of car insurance payments. bankrate.com says the average cost of auto insurance in New York is $2,996 per year for full coverage.
  • Four years of monthly electricity bills. The average monthly electricity bill for New York City consumers is $178/month according to energysage.com.
  • 3,636 subway trips. The cost of a subway ride is $2.75.