NEW YORK ( MainStreet) — In September, Congress began the process of reauthorizing the Higher Education Act, first passed in 1965 and last re-authorized in 2008. The Higher Education Act is the law that determines how federal dollars are awarded to post-secondary institutions, colleges and their students. The Act covers everything from loan limits to accreditation. Thirteen separate fact-finding hearings are likely to be held before the process is complete. A wrap up by the spring is anticipated.

In 2008, Congress tried to use to Act to make states answer for tuition spikes and limit abuses in the student loan system. Yet it failed to make college more affordable, and many - both inside Congress and outside the Beltway - have begun to question the value of post-secondary education.

During the last five years, some observers say that the U.S. Department of Education has formulated policies that circumvent the Act, and it remains to be seen how Congress will address this. The Chronicle of Higher Education reported on September 13 that the Department of Education "has stepped in with new policies outside of the Higher Education Act," including initiatives such as defining the credit hour. Congress has also altered the way student-loan interest rates are set.

Yet the Act will continue to wield considerable power—including the potential to lower the rates on federal loans made by the Department of Education. A staff member of a senator on the Senate Health, Education, Labor and Pension (HELP) committee didn't rule out the possibility that it could move to drop the rates of Stafford loans that were raised last summer.

"The loan program is under Title IV of the Act," said the staffer, who asked not to be identified. "This was not considered in the executive session. We hopefully will have a bi-partisan bill next spring, and interest rate policy could be examined as part of that." Last July, Congress voted to prevent a scheduled jump from 3.4% to 6.8% for subsidized Stafford loans, raising the rate to its current 3.85%. But further increases are expected throughout the decade, since the rates are tied to the 10-year Treasury Bill in an environment where rates are expected to rise.

"Reauthorization could set lower rates, but something else would have to be cut in exchange, given the budget-cutting mood on Capitol Hill," said Mark Kantrowitz, publisher of Edvisor's network, a provider of intelligence on student loans.

The Department counts on revenue from these loans. Kantrowitz said the impact is mainly budgetary. "If the rates are lowered, the revenue going to the federal government gets reduced, which may pressure the rest of the Department's budget," he said.

Kantrowitz believes that reauthorizing the Act will take some time. "I doubt reauthorization will be complete by spring, as there is still the House to contend with," he said. "But they could potentially finish the Senate portion by then."