If you’re reading this in a subway car with six people in it, chances are that one of you received good news yesterday.

President Joe Biden rolled out his plan to provide student loan debt relief to tens of millions of Americans on Wednesday, including an effort to cancel up to $10,000 for borrowers earning less than $125,000 — or $250,000 for married couples — and an additional $10,000 for Pell Grant recipients. The president also granted one final extension of a pandemic-era pause on student loan payments that will expire at the end of the year.

New York City Mayor Eric Adams heralded the news as essential for people in the city struggling to pay off their loans.

“This is real relief for working people in our city, especially our Pell Grant recipients and countless frontline and essential workers who kept our city moving during the darkest days of the #COVID19 pandemic,” tweeted Adams.

Gothamist spoke with Jacob Channel, a student loan repayment expert from New York City and an economist at Student Loan Hero, who said that as New Yorkers wait for more details on the president’s plan, they should begin budgeting and preparing for when payments resume in 2023.

Here are the key takeaways from that conversation:

What student debt looks like in New York City

According to Student Loan Hero data, 31.8% of borrowers across New York state have $10,000 or less in student loans – meaning they could be debt free when Biden’s plan goes into effect. The average student loan balance statewide, however, is $35,000, a bit lower than the national average of $36,689, the data said.

In New York City, one in six adults, or about 1 million people, have at least one student loan, and collectively they owe $34.8 billion, according to the city’s website. Channel said the numbers look different from borough to borough.

“New York state is a very diverse place, certainly economically. The difference between New York City and Buffalo, for example, despite the fact they're both in the same state, is pretty stark,” Channel said. “I think it's safe to assume that it's probably tens of thousands more people who could potentially have the entirety of their student loan debt wiped away.”

Manhattan reported the highest average student loan debt at nearly $40,000, and Staten Island ranked the lowest with less than $30,000. In Brooklyn, the average student loan debt was around $36,500. In Queens, that number was around $33,500. The Bronx figures were slightly more than $35,000.

New Yorkers most affected

Channel said that while all borrowers in New York will experience relief, especially due to the higher cost of living in the city, those in more financially vulnerable communities could see the biggest impact.

“The people who are most disproportionately impacted by things like excess debt payments are often members of the African American community and Latino community. So those communities, many of whom have a very strong presence within New York City, are probably also going to, in a sense, be sort of doubly positively impacted by this potential for forgiveness,” Channel said. “Not only do they have to deal with the higher cost of living, but they also may have to deal with other systemic issues like a lack of intergenerational wealth.”

The plan will likely face legal challenges

Channel said there was still much to be gleaned from the fine print of the plan and New Yorkers should learn more about the next steps in the coming weeks as more details become available.

“There are still a lot of ‘what ifs,’ he said. “For example, they haven't specifically stated how you go about filling out an application to prove your income to get student loan forgiveness. So there's going to be a little bit of a waiting game, and I think that New Yorkers just need to be prepared. Don't panic too much, don't freak out about it, but you know, it could take a little while, potentially even weeks.”

In the meantime, New Yorkers should begin budgeting to prepare for payments to resume

The student loan payment pause that has been in place since March 2020 will expire at the end of this year. Meanwhile, many New Yorkers are dealing with rising rents after they dipped during the height of the pandemic. Channel said New Yorkers should take this time to prepare for when student loan payments resume, especially in the face of rising inflation.

“I think now is a really good time to just re-familiarize yourself. Log back into your student loan account. Figure out how much you still owe. Figure out what your monthly payment will be once the pause ends and then start thinking and budgeting right now,” Channel said. “The more time you give yourself to budget, the more time you give yourself to prepare, I think generally speaking, the better off you're gonna be.”

‘I don't think that this is going to have a big impact on inflation.’

Because most people have not been making payments on their student loans for more than two years, Channel said the relief that’s coming won’t necessarily put more money in people’s pockets. That means it won’t be freeing up spending for people, he said, and shouldn’t have an impact on inflation – one of the key economic concerns that critics of the plan have expressed.

“I think that in the near term, it's unlikely that people are going to see extra money each month just because they've already seen that money owing to the student loan pause,” he said. “I don't think that this is going to have a big impact on inflation or something like that, or going to suddenly free up a bunch of money for New Yorkers to go out and spend on necessities like food and rent that they haven't already had access to and been spending [on].”

This story has been updated with additional information.