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.

FCC Reform Order

On July 23, 2014, the FCC released the E-rate Reform Order detailing how the program will be modernized to focus on high-speed broadband and Internet access. This order will create an opportunity for all applicants to receive E-rate funding for internal connections beginning in Funding Year 2015.

  • Webhosting, e-mail and paging service will no longer be eligible beginning in FY 2015.
  • All voice services, including cellular service, will be phased out beginning in FY 2015 by reducing the applicant’s shared discount by 20% each year.
  • Districts will now use a district-wide discount based on total district enrollment and total National School Lunch Program (NSLP) eligibility.
  • 2010 Census data will now be used to determine Rural/Urban classifications.
  • Commercially available 100+ mbps Internet packages costing less than $3600/year will no longer have to be competitively bid.
  • The 90% discount band for Category 2 (previously called Priority 2) requests will now be 85%. All other discounts will remain the same.
  • Category 2 equipment eligibility is solely based on internal broadband functionality and Wi-Fi — no voice or video equipment is eligible.
  • Each school building will qualify for a $150 per pupil budget (or minimum of $9200) over 5 years for C2 purchases.
  • Each library building will qualify for a $2.30 per square foot budget (or minimum of $9200) over 5 years for C2 purchases.
  • The technology plan requirement has been repealed entirely.
  • A 1-time invoice (BEAR or SPI) extension will be granted but only if submitted by invoice deadline (typically October 28).

Frequently Asked Questions