Old student loan - Student Loan help please!!

Just wanted to ask for some help. I have a old student loan fron alaska that I never really made payments on:( Well I got a credit report and am now trying to make good on the old accounts. Turns out that I owe the state like $9000 or so NCO says.

Well they tell me that I can put in for a settlement and all and I do.

I sent out the information to the IRS along with money for them to send certified copies of my tax returns for the last 2 years. Next thing I know NCO calls me back up and hangs up on my wife as I am at work?? Well I call her up this evening and she says that they will not forward my request for a settlement to the state of Alaska? So she forwards me to her manager and he says that he will not even forward it to AK? I'm like, "I thought that the St. of AK would at least get my offer?" The offer by the way was for $7500. Well he hangs up on me and I call the Rep. back and she's like "I THINK I'VE BEEN MORE THAN FAIR WITH YOU" I like yea well you told me that this would be forwarded to the state??
So I tell her that I guess I'll have to contact a lawyer now and she says that she will now have to garnish my wages?? She than hangs up on me? Oh yea, I live in CT now.

What should I do??

Thanks in advance; there seem to be a lot of great people on here!