There are Lawyers working on it. But the reason most of us don't have our very own personal Lawyer is (A) if we could afford that, we'd already have our loans paid off and (B) as you say, the Government is involved.
Since the Government is involved, and the Government makes the rules, they get to decide what is "fraud" and what is "murder" and what is an "illegal taking" and what is "assault", etc.
The lending system supporting our higher education system is structurally predatory. In the absence of fundamental, free-market consumer protections like bankruptcy, statutes of limitations, refinancing rights, and others), and in the presence of unprecedented collection powers that would make “mobsters envious” (Elizabeth Warren’s words), we have a student loan system where the big lenders make significantly more money on defaulted loans than healthy loans. What is worse: The guarantors (the entities that are supposed to police the lenders) make, on average, 60% of their revenues from penalties and fees attached to defaulted loans. What is almost unbelievable: Even the Department of Education (According to the President’s Budget), gets back $1.22 for every dollar they pay out in default claims for Federal Family Education Loan Program (FFELP) loans. Even subtracting generous collection and other costs from this profit still leave them clearly in the black. Imagine if it turned out that JP Morgan Chase, Fannie Mae, and even The Housing Department were making more money on defaulted sub-prime home mortgages than those which remained in good stead. This is the reality for student loans.
These financial motivations explain a wide and deep array of systemic defects, conflicts, and corruptions in the system that involve the lenders, schools, and most importantly, the Department of Education. One example, Sallie Mae and others have been found to have defaulted student loans en masse- without even attempting to contact the borrowers! Another example: all colleges routinely mislead students prior to taking out loans about their true default rates- they instead doggedly promote their reasonable sounding “cohort” default rates, and the Department of Education never does anything to correct this false impression (The true default rate across all schools is roughly 1 in 3, and has been for years, whereas the cohort default rate typically lies between 4%-8%). Similarly, students usually aren’t made aware that all the consumer protections mentioned above- and more- don’t exist for student loans.
A few common-sense questions are compelled here: Would you want to take a loan from someone who wanted you to fail in your endeavor? Doesn’t this put the lending system in a position of bad faith? Is this not a defining characteristic of a predatory lending system? Adam Smith, Milton Friedman, and every other western economist would answer yes on all counts.
But you know the deal. If THEY - "The Government" does it, it ain't a crime. If anybody else acted this way they'd be Enron'd.
