E-Rate FAQ’s

1. What is "E-Rate"?

2. Who is eligible?

3. What services are available?

4. What is NOT covered?

5. How much money is available in discounts?

6. What are the discounts?

7. How are the discounts determined?

8. What is the 30% rule and how does it apply to my application for e-Rate funding?

1. What is "E-Rate"?

The E-Rate is the discount that schools and libraries will receive for the acquisition of telecommunication services. Eligible schools and libraries can receive discounts of 20-90% on telecommunication services, Internet access and internal connections necessary for deploying technology into the classroom.

2. Who is eligible?

Schools: All elementary and secondary schools as defined within the Elementary and Secondary Education Act are covered. Private schools are eligible as long as they are not operated as a for-profit business and do not have an endowment exceeding $50 million. Individual schools, school districts and consortia are eligible applicants.

Libraries: Public libraries as defined in the Library Services and Technology Act (LSTA) are also eligible. This includes individual library branches, library facilities, library systems and library consortia.

3. What services are available?

Telecommunication Services: Schools and libraries are given maximum flexibility to choose among different types of commercially available telecommunication services for both voice and data. Examples include: regular telephone lines for teachers to receive phone calls in the classroom, pagers for security officials, high bandwidth telecommunication services, satellite delivery for distance learning, and coaxial cable.

Internet Access: Services for accessing the Internet are eligible for discounts. For example, E-mail and access to the World Wide Web are subject to discounts. Content, such as a paid subscription service, is not covered.

Internal Connections--Bringing the Technology into the Learning Environment: Basic installation and maintenance of a network are eligible for discounts. Examples of eligible technologies necessary for establishing a network include: routers, hubs, network file servers, wireless Local Area Networks and software needed for operation of file servers. Personal computers used solely as switches or fileservers are eligible. However, personal computers for teachers and students are not covered.

The most current Eligible Services List released on 10/10/03 describes and defines these services and the conditions in which they are eligible. This list is available in Adobe Acrobat Format http://sl.universalservice.org/data/pdf/EligibleServicesList101003.pdf

4. What is NOT covered?

Computers for teachers or students, fax machines, modems, software, professional development, and asbestos removal. Resale of discounted services is prohibited.

5. How much money is available in discounts?

Up to $2.25 billion per year will be available from the Universal Service Fund. The Fund for schools and libraries will be established on January 1, 1998.

6. What are the discounts?

Discounts range from 20-90 percent and are based on economic disadvantage and geographic location.

7. How are the discounts determined?

The level of discounts for schools and libraries is based upon the level of eligibility in the federal free and reduced lunch program. Libraries will use the school lunch eligibility percentage from their local school districts.

Review and Approval of Applications

Applications are reviewed for two purposes; first, for completeness, and second, for appropriateness. (See “Schools & Libraries Discount Matrix” above)

Completeness. The Fund Administrator or a sub-contractor to the Administrator will be responsible for collecting applications and ensuring that they have been completed by the applicant.

Review and Approval. In cases when a State Education Agency (SEA) cannot review and/or approve a technology plan, other entities will be made available to provide review and approval. For example, a private school may need a different review and approval body than a public school district. The U.S. Department of Education, in partnership with many national education associations, is working to provide advice to the FCC on alternative review mechanisms.

8. What is the 30% rule and how does it apply to my application for e-Rate funding?

It is really important that you complete Form 471 exactly as directed by USAC. According to "Step 7: Funding Requests Containing Ineligible Products and Services (The 30% Rule)" on the USAC web site:

If 30% or more of the dollar amount of the request in Form 471 Block 5 Item 23K is for ineligible services (including services for ineligible entities or uses), USAC will deny the entire Block 5 funding request, even if eligible components are part of the request.

If less than 30% of the dollar amount of the request in Form 471 Block 5 Item 23K is for ineligible services, USAC will reduce the request by the cost of the ineligible components and the Funding Commitment Decision Letter will cite the ineligible services for which funds were not committed. If the request is reduced, applicants and service providers must ensure that USAC is not invoiced for the ineligible items.

*This page contains information, at times condensed, from the U.S. Department of Education’s E-Rate Q & A page, located at http://www.ed.gov/Technology/overview.html

NOTE: Only the Universal Service Administrative Company (USAC) is authorized to determine the eligibility of products and services or to speak on behalf of the E-Rate program.

We urge you to visit the official Universal Service Administrative Company (USAC) website at www.usac.org for complete program details, guidelines and news. We urge you to understand and strictly comply with all guidelines furnished by the Schools and Libraries Program of the Universal Service Fund. We also urge you to contact the Schools and Libraries Program of the Universal Service Fund directly with your E-Rate-related questions.