I took a student loan to go to school in 2006. There was a provincial portion (Ontario) for about $3500 and a federal portion for about $5000. I have been paying the federal portion for a few years and I have about $500 left to pay. Yay! That was never reported on my credit file because I caught it before it went out to collections. Wish I could say the same about the Ontario portion. My file went to collections in 2009 I believe and CRA has been taking a cut from my tax returns and GST to pay for this. My file is currently with ARO Inc and the Ontario Student Loans office refuses to take any payments from me. They say that I need to deal with ARO. 

After calling ARO, they told me that I owe them a little over $4000 and that if I paid it in full in a lump sum, they would let OSAP know that I paid and this ding would be expunged from my Equifax report immediately. I find that hard to believe. I just was wondering if they are telling the truth or if they are pulling my leg. I can go ahead and make that lump sum payment but I am worried that if I do, my credit score will go down. I had serious debt issues back in the late 2000s and I worked really hard to get my credit back to where it is. The only blemish is ARO with this student loan and I don't want it to go back down when I am pretty much back up to 700 on Equifax including that report on my file. 

If anyone has any insight on this, it would be greatly appreciated. 

Thanks!