Plan 1: Cap the total amount of interest that can be applied to a consolidated student loan or that reduces the interest rate gradually to zero after a certain amount of the principle is paid.
Place a cap on the amount of interest a consolidated account can accumulate rather than allowing interest to compound over the life of the account.
If a student borrows $30,000, then the most interest that can be applied over the life of the account would be 20-30% of the principle.
Plan 2: Gradually reduce the interest rate with every $5,000 of principle paid. Reduce the rate to zero, allowing all payments to pay down the principle, once the last 25-30% of the principle amount borrowed is reached. On a $30,000 loan, the interest rate will be zero on the last $9,000 of the principle.