What is the E-Rate Program and How Can my School Benefit from It?

Students and teachers are increasingly utilizing digital learning resources and tools as part of the K-12 educational process. To do so, fast, reliable internet access is crucial, which requires more and more bandwidth. However, fewer than half of US school districts meet the minimum bandwidth goals established by the Federal Communications Commission (FCC), resulting in unreliable, slow internet access that interferes with learning and widens the digital divide. To help make broadband access more affordable for schools and libraries, the FCC began the Universal Service Program for Schools and Libraries (more commonly known as E-Rate) – and your school can reap the benefits.  

What is the E-Rate program? 

The E-Rate program is administered by the Universal Services Administrative Company (USAC) on behalf of the FCC. E-Rate allocates federal funding for schools and libraries to facilitate affordable internet connectivity for all. Eligible schools and libraries may receive discounts on telecommunications, telecommunications services, and Internet access, as well as internal connections, managed internal broadband services, and basic maintenance of internal connections. 

The two types of E-Rate categories  

The E-Rate program has two categories of services that are eligible for discounts:  

  1. Category 1 (C1): Seeks to bring connectivity to schools via basic internet access.  
  2. Category 2 (C2): Seeks to bring high-speed broadband connectivity to teachers and students to facilitate teaching and learning. Not only is network hardware eligible for discounts, but utilization of professional services to manage the hardware is also eligible. C2 funding can be applied to internal broadband, antennas, cabling, connectors, caching, firewall services, firewall components, racks, routers, switches, wireless access points (APs), wireless controller systems, and uninterruptible power supplies (UPS), as well as services to install and manage all of the above.  


How is the budget calculated for each E-Rate category? What is the budget cycle? 

Discounts range from 20-90 percent and are based on the poverty level of the schools. Whether is school or library is rural versus urban is also a factor. E-Rate periods run for five years, with the current period running from 2021-2025. Traditionally, the next five-year period is announced in the second to last year of the current period. No announcement has been made yet about the next budget cycle. Once the discount percentage is calculated, it will remain the same for every year in the current funding period.  

  • Category 1 funding: Once your school or library is in the program, you cannot run out of C1 funding. Unlike C2 funding, there is no finite allotment or budget to which you must manage. Funding can be used every year within the period.  
  • Category 2 funding: C2 funding has a finite budget for the current cycle and is based on a matrix that takes into account the number of students in your district and also the number of free and reduced lunch students. Once you’ve calculated the amount of funding available to you, it’s important to note this amount is your total dollar amount for the five-year period. It can be distributed whenever you wish over that period, either all at once, or at an interval of your choosing. 


Calculating your E-Rate discount and strategizing how to maximize it can be quite challenging. Many school districts and libraries find it helpful to consult with an E-Rate consultant during this process. The main thing to remember is that unused E-Rate funding does not roll over to the next budget cycle, so if you don’t use your E-Rate funding, you lose it.  

How can my school or library participate in the E-Rate program?  

  1. Determine your eligibility. Don’t assume that your school or library is too small to qualify. For the FY2021-FY2025 cycle, the funding floor is $25,000. 
  2. Determine that the equipment or services you are requesting are E-Rate eligible. 
  3. If you are already enrolled in E-Rate, calculate your remaining C2 budget. If you need assistance, contact an E-Rate consultant, or contact TechMD for assistance.  
  4. Use file Form 470 to start the competitive bid process.  
  5. Wait at least 28 days to receive bids from interested vendors.  
  6. Select your vendor and submit Form 471. 
  7. Receive the funding decision from USAC.  
  8. Once the vendor has provided the selected services, either the vendor or applicant requests reimbursement of the approved discounts from the USAC.  
  9. Repeat until you’ve used your funding! 


Is the use of a managed services provider eligible for category 2 E-Rate discounts?  

Yes, utilization of a managed services provider (such as TechMD) to manage network hardware is eligible for category 2 E-Rate discounts.  

Why should your school consider utilizing a managed services provider as part of category 2 spend?  

School and library tech directors and IT teams are already stretched thin. It’s impossible to keep a constant watch on your network, manage updates and patches, and monitor for abnormalities. With a partner like TechMD, your school can access a team of IT engineers for less than the cost of an additional school tech team member.  

TechMD understands the education sector’s unique requirements and security issues and has extensive expertise helping districts capitalize on the upsides of digitalization while protecting the communities they serve from becoming victims of cybercriminals. Contact TechMD today to learn how to provide a reliable, safe, and secure digital learning environment for your teachers and students without breaking your IT budget. 


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