Today's panel of Certified Financial Planners includes:
Dennis Hebert, Strategic Wealth Advisors
Ted Sarenski, Blue Ocean Strategic Capital
Grace Ghezzi, Benefit Consulting Group 

The issue:
College loans are ONE TRILLION DOLLARS in default...the second largest 'in the red' category in this country.
In part, it's because students coming out of college do not find jobs that can help them pay back on time.
But, it's not the students, it's the relatives who've co-signed who are on the hook:  at least two families in this area are losing homes, social security payments are being garnished, and credit ratings are dropping because of the defaults.
If you declare bankruptcy, this is one of the 'black marks' that does not get erased.
And, students alone cannot sign for loans, they need a co-signer.

A relevant website: www.studentaid.ed.gov

Details on the Obama 'bailout':
It only applies to borrowers with BOTH a Direct Loan (DL) and a Federal Family Education Loan (FFEL) that require separate payments.   The consolidation option begins in January and also includes a half percent reduction in interest rates on some loans.  Federal loan servicers will contact the 5.8 million borrowers early next year with how to proceed.

Changing the loan base:  this applies to more loan holders, of all kinds:  right now most paybacks are based on the SIZE of the loan.  You can change that to the size of the DISCRETIONARY INCOME.  Under that, right now, your payments are 15% of income after major expenses, like housing, car, food.   Soon it will drop further, to 10%.

Alternatives to loans: 
>529 savings plans.  Anyone can contribute, starting at birth, and if you get a New York plan, you also get a tax deduction.
There are several variations, with options if the 'student' decides not to go to college.
>Jobs that forgive loans.  There ARE jobs in these areas, which can also get you started on careers in your field of choice:
Teaching, especially in poor or inner city areas; Social Work;  Volunteering for PeaceCorps, AmeriCorps or Vista (many jobs have 'stipends'); Military service; child care; medical professionals (especially in needy areas); law (especially in needy areas).
>Tax credits against education: check the www.IRS.gov website, and search the pamphlet 'education tax benefits' or the 'American Opportunity tax credit.'  It's like 'free money'

Next steps:
Most of our calls were from parents and others who co-signed, NONE from students who defaulted. 
Talk about options (students need to take action, too!)...Consumer counseling groups and tax advisors also have help, and so will college financial aid people.  If you're just sending students off,  get advice, as well, from high school counselors---there are many financial aid seminars (free) in the area through the school year.

More answers below, in our internet chat.

And if you have more financial questions for next Monday and beyond, email us at money@cnycentral.com