The official, Kevin Jennings, says he should have handled the situation differently when he told the boy he hoped he had used a condom during a sexual encounter with an older man.
Jennings, who now heads the department's Office of Safe and Drug Free Schools, has been under fire from conservatives and right-wing groups for not reporting the incident to authorities or to the boy's parents.
In a statement Wednesday, Education Secretary Arne Duncan said Jennings has devoted his career to promoting school safety.
"He is uniquely qualified for his job, and I am honored to have him on our team," Duncan said.
White House Press Secretary Robert Gibbs addressed the situation Thursday.
"I think there are many good people from every political persuasion that seek to serve their country and serve in government," he said. "...I hope that, as people watch, they'll match up some of the actual truth to what is being said on some of these occasions, and start to provide a little reality check to some of what's going on."
Jennings was teaching high school in Concord, Mass., in 1988 when a sophomore boy confessed of an involvement with an older man in Boston.
Telling the story a dozen years later, Jennings described how the boy told of meeting the man in a bus station bathroom and going home with him. Jennings said he told the boy, "My best friend had just died of AIDS the week before. You know, I hope you knew to use a condom." Jennings was speaking during a conference of the Gay, Lesbian and Straight Education Network, which he founded.
Conservative psychology professor Warren Throckmorton unearthed an audiotape of Jennings' comments to the conference and posted it on his Web site recently.
In the Education Department statement Wednesday, Jennings said, "21 years later, I can see how I should have handled the situation differently."
"I should have asked for more information and consulted medical or legal authorities," he said. "Teachers back then had little training and guidance about this kind of thing. All teachers should have a basic level of preparedness. I would like to see the Office of Safe and Drug Free Schools play a bigger role in helping to prepare teachers."
The department noted that Jennings has won honors from groups including the National Association of Secondary School Principals, the National Association of Independent Schools, the National Education Association and the Massachusetts Counselors Association.
Some NEA members protested their organization's award to Jennings.