Nope, sorry. The info they gave you is correct. If you are a student, you *must leave* after your studies are finished. The immigration officer will put a stamp in your passport of your date to leave. My student visa goes till October 2006; the officer said he was giving me 3 months after my studies were completed to 'travel' {I didnt ask for the extension.} No, you cant change a student visa to a permanent visa. No, you cant quit school or not graduate and just stay. It's illegal. If they did do that, how would they survive? They couldnt work legally and obviously if they ever left the country and tried to re-enter, they would get caught by immigration.
Sadly, you just cant pick up and go to another country and stay just because you want to. If that were the case, there would probably be no need for the "Visa" message board here as we would all just go over to the UK to live, work, be with our partners, etc.
If your friend wants to go over to the UK with you that badly and you think the student visa might be an option, look for UK schools that are affiliated with the US Financial Aid system {FAFSA.} There is a list of int'l colleges online at the FAFSA website. Hopefully that will take away some of the pricey costs of paying the international student fees. Other then that, I really dont have any advice to give- sorry!
Good luck with your quest....