Paying off a collection agency with a loan?

I was unable to pay for one semester of tuition and was sent to a collection agency. I've been making my agreed monthly payments and I haven't been charged any interest of any kind. There was a hefty collector's fee put on the balance, but nothing has been accrued since then. What exactly should I do? In order to receive my grades, I do need to pay it off, but in order to do so I'll have to get a loan. The agency isn't showing up on my credit report (which is reporting that I'm "fair") but I know a loan will hit it and I'll be slapped with interest. I still need to take out another loan(w/ FAFSA) to continue on with school, so the fewer loans/interest I have, the better. Will continuing payments and not getting a loan to pay off the agency hurt my score in the future? And should I go that route? My grades at this point don't matter as much, since taking the courses again would cost less than the end interest.