Set-Off from DOE

Hi I Attempted to resolve my Student Loan Debt via Affidavit, Notice of Fault

Opportunity to Cure by Authority of 15 USC 1692g et al and se, CONSUMER ENFORCEMENT ACTION AND COMPLAINT letter, Violation Warning Denial of Rights Under Color of Law letter, w9 request form, notary. I was told if no response in 10 days to proceed filings to court. DOE responded and said they are not Debt collectors and the letters didn't matter to them the account needs to still be paid. on my credit report it lists as status -'Set-Off'. i hve filed SPCsince then. how do i address this matter of "off-setting" the account with the DOE?