E-rate, created by the U.S. Telecommunications Act of 1996, helps ensure that K–12 schools and libraries, particularly those in low-income or rural areas, have affordable access to telecommunications and Internet services. The program provides annual subsidies or “discounts” of 20 percent to 90 percent on eligible services and technology equipment.

For example, if a school district qualifies for a 90 percent discount, the E-rate program pays 90 percent of the cost, while the district pays the remaining 10 percent. The discount rates are determined by the percentage of students eligible for free and reduced lunches through the National School Lunch Program (NSLP). Public K–12 schools and districts and most nonprofit schools are eligible for E-rate funding. Rural schools are typically eligible for higher discount rates than urban schools.

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