Schools flock to the federal E-rate to bring internet into buildings; now leaders are using the funds to make sure student devices get online.

E-rate spending reveals schools’ tech evolution


Schools flock to this federal fund to bring internet into their buildings; now leaders are using these funds to make sure student devices can get online

Schooling has changed in many ways in the last two years, but while remote learning, mask policies and increased federal spending in education have gotten lots of attention, another trend has gone nearly unnoticed.

But thanks to the availability of detailed E-rate data, this sea change is now being recognized. E-rate is the federal government program that provides discounts of up to 90 percent for schools and libraries to bring high-speed internet into their building(s) and create internal networks for online access. For years, E-rate applicants have leveraged E-rate to bring fast internet service into their organizations, cobbling together funds and seeking out providers. But today, a new trend is emerging—more funds are being requested to improve internal networks, allowing the flood of devices now used in schools and libraries to effectively get online.

E-rate funding requested in Category One, which includes data transmission services and internet access, has declined for five straight years, largely a function of increasing marketplace competition and decreasing per-megabit prices.  But funding requests for Category Two services have soared in the same time period. Category Two funds can be spent on wireless access points, network switches, data cabling and other resources essential for on-campus connections.

E-rate Applicants Add Devices, Concentrate on Bolstering Internal Networks

This significant change is a natural outgrowth of all the devices that are used in schools after districts went remote for at least part of the pandemic. Pre-pandemic, 45 percent of schools reported having a computer for each student, according to a National Center for Education Statistics report on the 2019-20 school year. At least one more recent study said this figure nearly doubled to 86 percent as schools scrambled to give students devices to allow remote learning.

The need for infrastructure to support all those devices is evident in the E-rate funding data. In 2018, there was a $1.5 billion gap between Category One and Category Two, with about $2.6 billion requested in Category One. With Category One funding requests decreasing slightly and Category Two funding requests increasing dramatically, the gap has been rapidly decreasing. In funding year 2022, the expenditures for the Category One and Category Two are nearly even.

This vital information from the 2022 filing window will help district leaders better plan their E-rate strategy in the future.

Let’s look a bit deeper at these trends and understand what they show. In funding year 2019 and funding year 2020, the average total cost for Category Two services was relatively flat at slightly more than $20,000 per school or library site. But in funding year 2021, expenditures jumped to $26,500 per site in funding year 2021 and then rose again to $32,000 per site in funding year 2022.

E-rate Applicants’ Wish List: Switches and Wi-Fi

In funding year 2022, about half of the average per-site Category Two funding requested was for the purchase of network switches. This is where the rubber meets the road; switches take care of controlling traffic from a device to the internet, whether through a wireless access point or a data jack in the wall. These expenditures will allow the influx of students or library patrons who now have a school or library-issued devices to connect this device to the internet during the school day.

Next on the list was Wi-Fi equipment, with applicants spending an average of more than $6,000 per site. Over 40 percent of E-rate applicants requested E-rate funds on these devices. Data cabling was the next biggest funding request for E-rate applicants, followed by installation expenses.

But maybe the biggest change in these funds is how they are distributed. Better understanding this process can allow you to plan out your district’s technology upgrades while making sure you maximize your district’s use of E-rate funds.

The funds available for each district in Category Two are capped in five-year cycles. The current cycle began with funding year 2021 and will run through funding year 2025. A consistent funding cycle allows administrators to choose the best timing for network refreshes or upgrades, with the confidence that the entire funding cap will reset and start fresh in funding year 2026. More planning also increases the possibility that network deployment can be better managed and supported by in-school staff.

How E-rate Changes Should Alter E-rate Applicants’ Plans

More data from the recent filing period shows that the FCC is meeting one of its top goals, which is expanding E-rate support for the equipment and services needed to deliver high speed Wi-Fi to classrooms and libraries. School leaders can have confidence that they have the flexibility to deploy equipment over multiple funding years without fear that funds will be unavailable in any given year.

Another change that school leaders need to understand is that the FCC has removed the per-building cap from Category Two funding. In the past, districts typically couldn’t max out their Category Two budget caps because of the diverse nature of school sites within a typical district – variations in the age of facilities, construction materials, and infrastructure needs meant that some sites would exhaust their cap well before the need was met, while others would have excess Category Two budgets that could not be reallocated. Two years ago, the FCC removed this rule, meaning that many more districts can max out their requests and use the allotted money exactly where needed within the district.

Overall, more than 80,000 schools and libraries have applied for funds in Category Two in funding years 2021 and 2022. That’s a remarkable number that proves the need and effectiveness of the E-rate program.

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