Source: Liz Weston, L.A.Times ( Free Registration )

Dear Liz: My daughter co-signed a student loan for a friend who failed to pay the debt. Now my daughter cannot refinance her home because this loan appears on her otherwise very good credit reports. She has been getting calls from a collection agency.

"Lenders almost never settle for less than the outstanding principal balance of a defaulted student loan, so that may be the best she can get," said Mark Kantrowitz, publisher of the FinAid and Fastweb websites.

Read Full Article: Should a co-signer settle with collection agency?