Removing Defaulted Loan information from your credit report?

Hello all,

I defaulted on my US department of education student loans some time ago and I had them all consolidated into one loan to bring the account current under the income contingent plan. I have been making my payments on time. My question is that it shows on my credit report as a paid collection with a balance of $0. This is conflicting with my current loan, which is reported positive. Since each individual loan shows up on my report, it is severely affecting me.

I was working with a credit repair agency who removed a lot of other stuff off my report. However, they haven't been successful with getting the US department of education to change their mind. I have stopped using this service because I thought it was a waste of money.

I found that a goodwill letter on this website that one user used to get the late payments removed off her credit report. I spoke to the people at the US department of education and they told me to submit a letter to them requesting why they should remove the negative items off my credit report. I did this using the template I found here but I am looking for more information as to what else I can do.
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I am aware that the penalty of a defaulted loan is a 7 year sentence on your credit report but has anyone been successful with using a goodwill in removing defaulted items off their report? Is there anything else I should be doing???

Thanks!