Federal student loan interest rates, for undergraduate and graduate students, and both Stafford and PLUS loans, should be determined based on the T-bill rates, which is how rates were calculated prior to July of 2006. A reasonable cap of 4% should be used to prevent excessive rates. Those who have already graduated should be permitted to "refinance" at lower rates.
This will empower graduates to be able to pay off their student loans rather than simply wait for "forgiveness," which is actually a taxable event should they not qualify for the Public Interest Student Loan Forgiveness program.
Lowering the interest rates will result in savings of hundreds of dollars a month for many of us, which is not an insignificant amount in this economy.