Reauthorization is the process where Congress looks at the financial aid industry and makes modifications, additions, or deletions. Normally, reauthorization is completed every few years, but the last time was 1998. Bill Clinton was the president.
Since then, extensions have been granted for the existing financial aid processes/awards. Granted, President Bush has increased Pell Grants by increments in academic years, but this is not the same as reauthorization. What President Bush approved was budgetary. Reauthorization addresses the "supposed" changing needs in financial aid.
So how does the process work? Hearings are held at numerous sites around the country. This is the opportunity for individuals and organizations to present their view to legislators. Basically, what it boils down to is that each side of the governmental house then holds its own hearings and drafts its own bills. These bills are presented to the House and Senate, respectively. It's pretty much a given that both sides will not be in agreement. When each bill passes each house, a conference committee is formed, made up of both Representatives and Senators, to work out the differences.
Eventually, both sides work out the differences (hopefully) and submit a unified bill to the House and Senate for approval. More discussion, of course, and more changes. Once agreed upon, the bill is approved by the House and Senate and forwarded to the President to sign into law.
Once a law, the Department of Education is assigned to draft the regulations. Notice of Proposed Rulemaking (NPRM) is issued to solicit comments from interested parties, such as financial aid administrators and students. Negotiated Rulemaking is another effort that was implemented during the last Reauthorization. NegReg is designed to encourage interested parties to work along side Congress and the Department of Education in creating a constructive and proactive approach to new legislation.
Once NPRM or NegReg is completed, the Department of Education issues rules concerning changes to the financial aid program(s) to institutions for implementation. Reauthorization, which has not yet been finalized, can change the look of the FAFSA, or even change how federal programs are administered. Once Reauthorization is finalized, I'll post the changes.