RHajmand

As Krzywon indicated, there's no statute of limitations on federally guaranteed student loans. The gov't can bring a claim at any time (although, you actually have to work at getting sued -- it happens, but it isn't particularly common). And they will snag any tax refund you might otherwise be entitled to when you get back to the states. Which can be a real nuisance. But ... if there's been no activity on the loan in more than 7 years, it should have dropped off your CR. (I discovered this myself when I was dealing out my last student loan and learned that I actually had a 718 credit score -- while still in student-loan default). Which brings you to back to how to handle the matter. Rehabbing the note *might* bump your credit score -- but a quick glance at TG's website shows that their "rehab" option has been suspended for the moment (the economy and all). In any event, the easiest (and probably cheapest) way to do it is to settle for a hard number. Take a look at that 13K figure again. Often that number breaks down to "Principal," "Interest," and "Penalties." The rule here is that they will never negotiate the principle, they'll generally settle interest at 50% ... and don't even discuss penalties. "Penalties" aren't collectible unless someone is crazy enough to pay them. In talking to these folks, don't "admit" anything -- just discuss what you are willing to consider doing to resolve the matter. Be calm, be businesslike, and never show fear or concern. This is just a business transaction. And whatever you do -- get EVERYTHING in writing -- particularly before sending anyone so much as a penny.