E-rate is a telecommunications discount program that reimburses a portion of bills paid for eligible products and services received by eligible schools and library applicants.
E-rate is not a grant program – applicants do not receive money up front for purchases they intend to make, nor can applicants purchase anything they feel like.
Applicants apply annually for a discount portion of the anticipated costs of eligible items. It is only after those items have been installed and/or received and the applicant has either paid in full or paid their non-discount portion, that a request to be reimbursed for the approved E-rate portion can be submitted by either the applicant (if the applicant pays the full costs) or the service provider (if the applicant pays only the non-discount costs).
GOVERNANCE OF THE E-RATE PROGRAM
Program funds are held in the Universal Service Fund, which is administered by the Universal Service Administrative Company (USAC) under the direction of the Federal Communications Commission (FCC). The Schools and Libraries Division (SLD) of USAC collects and reviews all E-rate application documents, makes the funding decisions, and disburses awarded funds.
The E-rate program is designed to assist schools and libraries obtain high-speed telecommunications and internet access at an affordable rate.
Funding supports connectivity – the conduit or pipeline for communications using telecommunications services and the Internet. Applicants are responsible for providing additional resources such as end-user equipment, software, and other elements necessary to realize the objectives of connectivity.
E-rate is available for eligible products and services in two categories:
Category One (connections TO schools and libraries)
Data Transmission Services and Internet Access
Category Two (connections WITHIN schools and libraries)
Basic Maintenance of Eligible Internal Connections
Managed Internal Broadband Services
The E-rate portion that an applicant can receive is based on a discount percentage. Discounts for support depend on the level of poverty as measured by the percentage of students eligible for the National School Lunch Program and the urban or rural location of the population served. The higher the poverty level, the higher the discounts.
For Category One, discounts range from 20% to 90% of the costs of eligible services.
For Category Two, discounts range from 20% to 85% of the costs of eligible services.
E-rate funding commitments are made by the funding year (FY). Each funding year runs from July 1st through the following June 30th.
The funding year number is referred to by the year in which most services will begin. For example, FY2021 = July 1, 2021 through June 30, 2022.
Applicants must apply every year they want E-rate, with the process beginning as early as a year before the funding year.