The private student loan industry is pretty small as compared to the public market and the rules and considerations when servicing them are very different. So i

The private student loan industry is pretty small as compared to the public market and the rules and considerations when servicing them are very different. So it is unsurprising that the big servicers for federal student loans are only in that business and not loan servicing generally. That's different in important ways from a refinery that sells fuel to all commers. As for the road example, road building is an inherently local activity. If the federal government hired someone to hold a flag in Topeka it's be pretty unreasonable to expect him to start holding a flag in Phoenix next. So in that sense the need is temporary. But loan servicing can be done anywhere. My servicer is in NH for example. So the government could hire a bunch of people anywhere and bring it in house.