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What are my options to deal with Student Loan debt collectors?
You have not specified what country you are in. That radically changes everything. In case you are in Canada, there's a great blog that covers bankruptcy and student loans, at http://student-loan-bankruptcy.ca/. Fundamentally, in order to discharge government-backed student loans, you must have ceased to be a student for at least seven years prior to filing. Even then, though, the government can object, in which case you will still have to repay some or all of the loan. More generally, given that the collection agency appears to be operating in bad faith, you'll want to ensure that they send you written documentation of any offer they are extending you. If they refuse to do this, you should assume that they aren't actually offering you anything at all and you will have to pay back the full amount plus interest and penalties. Note that, in many countries, if you settle the debt (that is, pay anything less than the full amount plus interest and penalties), this will be a black mark on your credit report. In this case, if you repaid the full $16,000 and they forgave the extra $4,000, they would most likely still add a note to your credit report indicating that you did not pay the full amount that you owed, and this will negatively impact your credit rating even beyond your late payments.