Over the past few months, I've been following two college-loan stories. The first was the debate in Congress about how high the federal student-loan interest rate should be. The second involved an acquaintance of mine -- I'll call her Debbie -- who's trying to find a way out of student-loan hell.

Back in the late 1980s, Debbie borrowed money to go to a four-year college. After struggling with her grades and being put on academic probation, she switched to a community college. Readmitted to her four-year school, she borrowed even more money and ended up with $17,000 in federal loans.

After graduation, Debbie held a series of low-paying jobs and never made regular payments on her loans. Eventually, the Department of Education turned over the unpaid debt to a collection agency and began garnishing Debbie's wages. With her personal finances in disarray, she declared bankruptcy. But her loans continued to accrue interest and fees.

About a year ago, Debbie got a notice saying that if she didn't increase her payments, she would be subject to tax offset and her refunds would be seized. She figured that it couldn't apply to her because her wages were already being garnished, so she disregarded the notice -- and lost her tax refund. That was the wakeup call she needed to seek help from a friend of mine, who called me (and my Kiplinger colleagues) for guidance.

Although Debbie's wages have been garnished for a decade, she still owes $24,390 in principal, interest and fees. Now she's talking with a credit counselor, who, we hope, will be able to tell her what she needs to do to square herself with the feds and set up a payment plan she can afford.

Making the right upfront decision is key to controlling your borrowing costs. But on a broader level, I think we also need out-of-the-box thinking to tackle spiraling college costs and student-loan debt.

Glenn Harlan Reynolds, a law professor at the University of Tennessee, argues that schools themselves need skin in the game. He suggests, for example, that federal aid could be tied to an index, and that schools could be on the hook for a percentage of a loan if a student defaults.

That's a radical idea. But I can't help thinking that if, instead of readmitting my friend Debbie after her probation, her four-year school had told her politely that she would be more successful, both academically and financially, by remaining in community college, she wouldn't be in the fix she's in today.

(Janet Bodnar is editor of Kiplinger's Personal Finance magazine and the author of Raising Money Smart Kids (Kaplan, $17.95) and Money Smart Women (Kaplan, $15.95). Follow her on Twitter at http://www.twitter.com/JanetBodnar. Send your questions and comments to moneypower@kiplinger.com. And for more on this and similar money topics, visit http://www.Kiplinger.com.)