Can you consolidate loans if you have bad credit?

I have an insane amount of student loans and since the economy went south, so did my chances of a job in that field that would have helped with repayment. I barely make any money as it is and now I have the student loan creditors after me and a person who cosigned one of my loans. This past year my credit went from great to horrible. I want to consolidate my loans in hopes of a smaller monthly payment, but someone mentioned that if you have bad credit it doesn't help. I feel like I was misinformed by the school I attended and am having trouble getting the right information. Does anyone know a good place to go to get info on help with student loans? I know it sounds silly, but wouldn't it be nice for student loans to get a bailout? I mean, all these corporations and banks getting bailouts aren't using them the way they were supposed to. Why not bail out all the Americans with mounds of school debt?