To keep interest rates on student loans low, why not offer them an alternative way to pay down the interest on their loans.
I suggest that, in a time when jobs are scarce, volunteering their time after graduation could serve as a mean to give back in lieu of cash. Until such time that a recent graduate finds a job, it might prove beneficial to allow them to work in city, state or federal or charitable organization job to pay the interest and/or principal down on their loans.
Each student would still have the opportunity to switch back to monetary payments depending on the status of their financial situation.
The benefit to the taxpayer is that government and charitable services will get the needed personnel to continue providing their service(s).
The benefits to the graduate is that they acquire the skills that will benefit them when they do land their first ideal job. They will be getting the experience that employers hope to see in even their newest recruits.