Colter Marino ’27
Contributing Writer
As of Sept. 28 2026, the 10-year Treasury yield is 5.2%. For Trinity students who rely on federal student loans, this number could affect the interest rate attached to their student loans.
The 10-year Treasury essentially acts as an IOU from the U.S. government. Investors lend the government money for 10 years, and in return the government pays interest. When the yield rises, it means the government is paying more for any newly issued IOUs. While it might seem that a rising 10-year yield is only making borrowing more expensive for the U.S. government, it is a sign of borrowing becoming more expensive across the economy.
For student loans in particular, the impact is direct. Federal student-loan rates are tied to the 10-year Treasury. Each year, the government takes the yield from the final 10-year Treasury auction (where the government issues new 10-year Treasuries) before June 1 and adds 2.05 percentage points. The interest rate for federal undergraduate loans issued in the 2026-2027 academic year is 6.52%. If yields remain at current levels into the Treasury auction used to set rates for the 2027–28 academic year, the new undergraduate loan interest rate would be about 7.25%. That nearly 0.75 percentage-point increase can significantly raise the total amount repaid. On a $30,000 loan repaid over 10 years, that difference would change the roughly $11,000 in total interest to over $12,000. While a financial-market number may seem distant, it has the ability to show up in ways as personal as student loans.
A 5.2% yield is also high when compared to recent years. In early 2021, the 10-year Treasury yield hovered around 1%. This trend of increasing interest rates highlights the changing borrowing environment. That trend is even more apparent when looking at the 30-year Treasury yield, which sits at about 5.5% as of Sep. 28 2026, a number not seen since 2004. Because 30-year Treasuries fix government borrowing costs for three decades, the rise in yields shows that investors are demanding a higher return to lend to the U.S. government for long periods of time.
The Treasury Department and its Secretary, Scott Bessent, have announced bond buybacks where the government repurchases Treasuries from investors. This is aimed at liquidity support, attempting to stabilize the Treasury market. In August, Bessent announced a maximum buyback of $4 billion per operation, up from the original proposal of $2 billion for 10-30 year Treasuries. Yields initially fell following the announcement. But the relief was short-lived. In September, Bessent announced a different $6 billion buyback plan specifically for 10-20 year Treasuries. Yields rose following the announcement and continued rising.
The Treasury estimates that in the final three months of 2026 the government will need to borrow $628 billion. If yields continue trending upward, that borrowing will become more expensive. So whether it be the U.S. government or a college student, the costs of borrowing are going up.
