Kent state SOLD the bill for 2300 to the Ohio Attorney General.

Minor distinction to make here. Kent State did not sell your debt to the Ohio Attorney General (OAG). Kent State is a public university and you owed them money. One function of the OAG is collecting debts owed to the state.

The problem is that I refuse to pay 5000 on a loan that was 2300 originally, and that was sold without reason or notification to me to CELCO.

The state does not need a reason to sell your debt and it sounds like you were notified since you mentioned receiving letters from them.

What are my options here?

If the collection agency will not negotiate with you, it is hard to tell whether you have other options.

There are laws that regulate the actions of debt collectors. I don't think we have enough information here to tell you if the debt collectors ran afoul of any of these rules.

You might want to find an attorney in your area that handles consumer protection. If money is issue, I would try contacting your local legal aid society.

I know that there is one attorney from Legal Aid of Southwest Ohio that has tackled very similar issues involving the debt collection originating with the OAG. It might be worth contacting them even if you are not in southwest Ohio (call their general number and they should direct you to the right person).

Am I really at risk of getting my wages garnished?

It's not impossible. The debt collect will have to sue you, win that judgment, and then seek an order to garnish your wages at that point.

Keep in mind that there are rules in place that govern what percentage of your wages can be garnished.