PainTrain,
Get a basket to go on top of that rack and then use bungee cords or pieces of old tubes to keep the backpack inside. Wald makes a good cheap one. This set up is popular in Europe becuase you can easily take the backpack with you to class or work after locking the bike and you can shop on the way home, put whatever you buy in basket and wear the pack on your back for the rest of way home.
It's cheap and low tech and it works for a lot of commuters!