The subsidy payment issue that came to preoccupy Mr. Oberg grew out of decisions Congress made in the 1980s to ensure that low-cost student loans were available at a time when the economy was souring. Lawmakers guaranteed nonprofit lenders a rate of return of 9.5 percent on student loans that were financed by tax-exempt bonds to protect the companies from spiraling costs.

Congress eliminated much of the subsidy program in 1993 because interest rates had dropped, but at that time retained the 9.5 percent return for existing loans. By 2002, lenders had devised ways to inflate the volume of loans for which they received the 9.5 percent subsidies. Congress closed one loophole in 2004, but lenders found others. Congress further restricted the subsidies in 2006.

In 1997, the Clinton administration proposed legislation to eliminate all references to the subsidies from the Higher Education Act in an effort to rein them in. Mr. Oberg took the legislation to Sally Stroup, who was then serving as senior aide to the Republican chairman of the House education committee.

“Sally told me there was no way that language was coming out,” Mr. Oberg recalled. “She didn’t give a reason — just forget it.” Ms. Stroup, who went on to become an assistant secretary of education in the Bush administration, and who is now back as an aide on Capitol Hill, did not return several phone calls and messages left for comment.

In 2000, Mr. Oberg transferred to the department’s research operation, and two years into the Bush administration, began to review the government filings of Nelnet and other lenders. He found that not only were payments to lenders rising rapidly, but also that the base amounts of the loans lenders were claiming as eligible for the 9.5 percent subsidies were exploding.

“Several big lending agencies were gaming the system,” Mr. Oberg said in a recent interview at his home in Rockville, Md.

He notified the Education Department’s inspector general’s office. He also told his superiors but felt they were brushing him off. So in November 2003, he wrote a memorandum for general distribution throughout the department warning that lender manipulations could cost the government billions unless stopped, and he recommended that the secretary could end the abuse with a letter to lenders clarifying government rules.