NEW YORK (MainStreet) — Student loan debt is turning into a game-changing event for younger U.S. consumers, and for their parents who, in many cases, wade in to help pay the tab.

According to FinAid.com total student loan debt has exceeded $1 trillion (the site has a “student loan debt clock" that stood at $1.07 trillion as of Thursday).

College debt has also surpassed credit card debt, an uneasy trend for college graduates struggling with credit card bills on top of their student loan payments.

READ: Three smart ways to pay back student loans

The federal government and its favorite college tuition lender has noticed.

Specifically, Sallie Mae is getting really aggressive about pushing its Smart Option Student Loan, which the lender says offers lower interest rates, a menu of repayment options and cash rewards for paying your student loan bills on time.

Giving college borrowers some options seems like a good idea. Nobody’s financial situation is the same, and the “smart option" takes that into account with increased flexibility in loan options and (especially) in payment terms, including:

• Deferred repayment: The Smart Option Loan enables borrowers to make no payments during school if they don't want to.
• Fixed repayment: The program allows borrowers to pay back as little as $25 per month while you’re in school, which Sallie Mae says can curb 10 percent of your total student loan bill. Normally, college loans are paid off after the student graduates.
• Interest repayment: If you really want to get ahead of your student loan debt, the smart loan allows you to pay the interest on your college loan while you’re still in school. That can save you 20 percent off your total student loan debt, Sallie Mae says.
• Cash back on timely loan payments: The Sallie Mae smart loan takes a page out of the credit card playbook and gives you 2 percent cash back on monthly payments made on time while you are in school.
• Lower interest for automatic payments: If you set up automatic payments with Sallie Mae, the lender will slice 0.25 percent off your loan interest rate.

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The Smart Option Student Loan, rolled out in 2010, seems to be a hit with consumers. Sallie Mae reports that 56 percent of smart loan borrowers are making payments while still in school. The lender also notes that it’s paid out more than $2 million in cash-back rewards to on-time borrowers.

Paying back student loans on time while still in school doesn't just pay off loans faster; it also means college students are building good credit that will come in handy when renting an apartment or buying a car.

“Paying for college is a significant commitment for any family, and in many cases it is a student’s first opportunity to participate in a major financial decision,” says Charlie Rocha, a senior vice president at Sallie Mae. “We’ve designed our loan program to promote financial responsibility by encouraging families not to wait until graduation to start loan payments, even nominal ones, and rewarding them for it.”

For college student facing back-breaking debt, the smart loan isn’t perfect. But it is a step in the right direction for college students looking for creative ways to handle their debt.