As he begins retirement this month after 40 years of federal service, the Education Department's departing inspector general, John P. Higgins Jr., sees one area that stands out for its susceptibility to costly waste and abuse. That area, Higgins said in an interview as he finished packing up his office, is student lending. Unless Congress greatly simplifies the system, the department's former chief auditor believes his successors will always have plenty of work to do. Higgins said the level of complexity in the student-loan system, which includes a variety of mathematical and financial variables to derive the rates paid to lenders, remains an obstacle to long-term improvement and hinders effective oversight. Other loan-industry experts and officials agree that the federal system is complicated but do not believe that fact alone guarantees the programs will be open to abuses or poor oversight. The Education Department had already been examining some options for improving its student-loan operations, such as simplifying the eligibility questionnaire used by students and their families.