TEXT OF INTERVIEW

Kai Ryssdal: I don't know why I remember this, but I do. The monthly payment on my student loans was $92.42 a month. Not all that much money in the grand scheme of things. And not much at all these days, when tuition is so much more expensive and student debt loans are so much higher. The student loan industry though is adapting to the times.

We've got Tess Vigeland, the host of our personal finance program Marketplace Money, with us to explain.

Hey Tess.

Tess Vigeland: Hello Kai.

Ryssdal: Student loans, change is a-comin'.

Vigeland: They are. And I have a pop quiz for you.

Ryssdal: I hate it when you do that. All right, go ahead.

Vigeland: How many people have student loan debt?

Ryssdal: A million.

Vigeland: Not quite, but two-thirds of all college graduates last year left school with student loans.

Ryssdal: Wow. All right and how much did they owe though?

Vigeland: On average, $23,000 and that's just for undergrads. If you are a graduate student, it's another $18,000.

Ryssdal: And these are kids who are graduating into an economy with no jobs, no nothing. Is there a plan to help them in any way?

Vigeland: You know, back in 2007, Congress passed the College Cost Reduction Act and as part of that, every year, interest rates go down on July 1. For example, if you've got a subsidized Stafford loan, the rate is dropping. If your old variable rate loans are still out there and you haven't consolidated yet, it's actually pretty good news, cause this year you can get them down to about 2.5 percent, which is an extraordinary rate for a student loan.

Ryssdal: What about everybody else out there that is carrying debt?

Vigeland: Yeah, new students will get a break this year, down from 6 percent to about 5.5 percent. And again, this is on certain subsidized loans, not private loans -- private loans are not subject to any of this. And people who are under the poverty line or who owe in student loans at least as much or more than what they are making in a gross income, they are eligible for a new income-based repayment plan. It's all very complicated, but we've got some links on the Web site to help folks figure it out.

Ryssdal: Which is of course, on Marketplace.org. You try to get money for anything, obviously, lots of paperwork. There are changes I understand to the form, to the financial aid forms.

Vigeland: Yeah, you know Kai, anyone's who's ever filled out the application for financial aid knows it is unwieldy. I think that's a charitable word for it. So this week, the Department of Ed announced a big streamlining effort.

The form is actually going to get physically shorter, if you get the paper version. Online, it's going to get significantly shorter as well. There used to be more than 100 questions. They are cutting out a whole bunch of them. And if you do it online, they're going to link you to the IRS, so you can automatically import a lot of the information that they ask you for. So it should become a lot easier. Which is good, because there are studies that show, students actually don't apply for financial aid, because the form is so onerous.

Ryssdal: Which is crazy. Give me some sense of the student loan environment out there, in this credit crisis, a year, a year and a half on. Is there money to be had to go to school left?

Vigeland: There actually is. More than you've kind of heard over the last year. But a big part of the problem with the student loans was the private ones. Because of the credit crunch, a lot of banks basically shut down their lendings. Now of course, the Obama administration is talking about making it so that private loans no longer get federal subsidies. So almost an effort to get rid of the private loans. But on the government side, there are student loans to be had, you just have to do the student research.

Ryssdal: Tess Vigeland, she hosts our personal finance program, Marketplace Money. Tess, thanks a lot.

Vigeland: Thanks Kai.