Student Debt Question

I went to a university for a year, stayed on campus in the dorms, filled out FAFSA did all that jazz and came out fine. The following year I also stayed on campus but didn't file FAFSA due to some issues at home. I picked up a job and hoped I'd be able to pay off any debt I incurred while going throughout that school year. The fall semester went by and I ended up accumulating something close to $5,000 dollars in debt that I couldn't pay off.

I was registered for the spring semester and started it. However, I was dropped from classes and asked to leave campus 3 weeks in to the semester since I had a balance due that I hadn't made even.

I was forced to leave campus. I've been in and out of 9 different residences in 2 years since I sublet everywhere... The university sold my debt to a debit collections agency. National Credit Management. They say I owe $8757.85, the university however, states I owe $6568.55.

I make $20,000 dollars a year and walk away with around 400-500 a month pending random failures in life such as a blown tire or broken tools for work. The debt collection agency got in contact with me and initially was nice enough to go over somethings but when I didn't offer payment instantly they started to become harsh, which I'm not unaccustomed to. I eventually stopped talking to them, for 6 months now I've done nothing but try to save to pay off the debt and I get my tax return check in for 1700 dollars. I can not afford to pay off the debt in full in a reasonable time frame with the current rate I'm paying it off and I need to get back to school ASAP.

I've talked to the agency and wrote them 2 letters to settle for less than what they were asking but they refused to do so. Does anybody have input in regards to what I should do outside of spend the next 2 years working to pay off a debt so I can get back in to school and incur more debt?