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Education Dept. Whistle Blower Sues to Recoup Funds from Lenders

Education Dept. Whistle Blower Sues to Recoup Funds from Lenders
September 1, 2009

In 2006, Jon H. Oberg revealed himself as the Education Department researcher who had brought to light revelations that several student loan companies were taking advantage of a loophole in federal law that allowed them to continue to make loans for which they were guaranteed an interest rate return of 9.5 percent. On Monday, the next step in his whistle blowing effort became clear, when a federal court unsealed a lawsuit he had filed under the False Claims Act, seeking the return of $1 billion in subsidies that he says a group of lenders illegally received from the government. Under the False Claims Act, citizens who believe they have identified fraud committed against the government sue, hoping to be joined by the U.S. Justice Department. (The Justice Department declined to join the suit last week, leading to it being unsealed by a federal court in Virginia.) Oberg, a former Congressional aide and staff member at the Institute for Education Sciences who is now a private citizen, is suing Nelnet, Sallie Mae and nine other lenders.

 

 

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