Should I settle Student Loan?

I have 4 student loans, 2 with the same (private) lender, and the other 2 with different government lending companies. When I first got a job I made a mistake with my payments. What happened is that I started making one payment to the private lender (assuming they would split between the 2 accounts). Well that was a foolish mistake by me, and since I wasnt paying much attention to things, I ended up defaulting on one of the private loans.

At the time I explained what happened and asked if I could just go back into monthly payments since it was a mistake. At that time they only wanted the full amount of the loan. I couldn't come up with that money, so I accepted the consequences and lived with my mistake.

It's now 5 years later and I have enough money set aside that I could easily come up with an amount to settle the debt at an amount less than original loan. Typically, I believe that this type of thing would be removed from my credit report after about 7.5 years.

However, I was wondering if it would be worth settling the debt, even though this may reset the 7 years for removing from my credit report, could it look better that I did try to pay it off?