Student loans stay expensive as Treasury yields remain high

The caution lands as consumer borrowing sentiment around credit card use is flashing extreme greed, with Adalytica’s Credit Card Usage Sentiment at 89, suggesting households are still willing to lean on debt even as the cost of money remains elevated. By contrast, wage inflation sentiment is neutral at 56, offering less reassurance that future income growth will comfortably outrun repayment burdens.

For investors, the story reaches beyond student borrowers. Heavy debt loads can pressure discretionary spending by younger consumers, while lenders tied to private education credit, refinancings and broader consumer finance are exposed to repayment stress if labor-market conditions soften or rates stay sticky.

The message for incoming freshmen is straightforward: borrow only what is necessary, compare federal aid with private offers carefully and model repayments against a realistic first-job salary. The next catalyst is the path for Treasury yields and Fed policy, which will help determine whether the cost of financing college eases or remains a drag into the next academic year.