Create a government owned Student Loan Corporation (SLC). The SLC would then offer to refinance all student loans at 150% of the 10 year federal funds rate over a 30 year period.
The current policy has resulted in high interest burdens for college graduates, and dramatic rates of default. This situation has created a lot of anguish for a whole class of people and has retarded economic advancement. Using federal credit would reduce the interest burden and allow most borrowers to pay their debts without incurring significant costs for the government. Instead of loaning trillions to big banks at .4% interest, lending can be done to students to actually fund their education.