Bad credit, sallie mae private school loan?

Ok i have a large sallie mae private school loan that went into default (now around 39k with 5k in interest) since i lost my job. if i work with the collections agency to put 2k down and make monthly payments of maybe 280-450 (i dont know how im going to do this with no job - i'm looking hard though) how long do you think it would take me to pay it off? This is the only major thing on my credit report thats affecting me. my score is 529 because of it. how can i raise the score? can i raise it WHILE paying the loan off or only AFTER i pay the loan off?
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