What should I do about a loan I co-signed, and am sure will be defaulted?

I regrettably co-signed a school loan for my friend several months ago. Since then, he has lost contact with me, has sold everything he owns, and is into some bad stuff. The loan was for around $20,000, He said he was going to consolidate this loan with another, so that I would not be involved with it any more by next year. He dropped out of school, and had most of his property re-possessed. I don't know what to do!! Is my credit going to be ruined? I am so worried and I feel incredibly stupid for agreeing to let him use my signature to get himself the loan. Is there anything I can do? Could I say he forged my name?