If keeping private banks subsidized with an interest rate lower than inflation is important, than so should making sure that students can get quality education. Rather than loaning money to banks who use the money to make more loans, you should just cut out the middle man and loan directly to citizens. Education of our people in order to make America a more competitive economy should be much more important than making sure banks who make money based on debt enslavement survive another day in order to profit off of the backs of the poor.
I believe a rate should be put on what major you're trying to obtain. For example, if you want an M.D. or D.D.S, your rate should be a lot lower than for example someone who is trying to major in Art Appreciation. Reason? Because the M.D. or D.D.S. will be more of an improvement to society in the short/long run, and are most likely to pay off the loan.
Banks have money, as a rule. The chances are much higher that banks will be able to pay back loans than they are that students will be able to. With student loans, you are depending on a student not only finishing college, but also being able to get a job, and not just that but a job that pays enough that the student will be able to pay back the loan.