E-rate is a $3.9 billion federal program that provides schools and libraries with funding support for high-speed internet access and internal network equipment. Some 95% of school districts in New Jersey apply for reimbursement discounts through the E-rate program every year and receive critical funding for the connectivity needed to support digital learning.

In 2014, the E-rate program was modernized and a new budget approach for Category Two funding was adopted for a five-year test period.

This is separate from Category One funding, which covers internet access from service providers. Starting in 2015, every school was allocated a pre-discount five-year Category Two budget of $150 per student to upgrade internal connections like cabling, switches, routers, and access points for Wi-Fi.

Due to a successful test period and positive feedback from the community, the Federal Communications Commission (FCC) recently issued a highly anticipated Report and Order. The Report adopts a permanent Category Two budget system for all applicants and establishes streamlined Category Two rules, which will take effect starting in funding year 2021.

To ensure a smooth transition to the new permanent rules for 2021, the FCC has extended the test period rules — used during funding years 2015-2019 — through funding year 2020. In other words, the five-year test period and budget is now a six-year period and budget for all applicants.

A central outcome of this decision is that applicants can use any remaining budget and will be provided with an additional prorated portion of Category Two budget for funding year 2020 — increasing all applicant budgets with a one-time bump of 20% for the current funding year. Any funds not used this year will expire and will not carry forward.

Schools can calculate their available budget by multiplying $195.63 (which includes inflation adjustment) by their student population and subtracting any funding previously received since 2015. District and school leaders are encouraged to take advantage of this use-it-or-lose-it funding opportunity to invest in network upgrades for improved classroom connectivity.

Looking ahead to 2021, here are some of the most significant rule changes that will be implemented:

  • All applicant budgets will be reset with fixed 5-year budget cycles.
  • Category 2 budgets will be calculated on a district-wide budget basis, although small school districts with ten or fewer sites have the option to calculate their budgets on a per-site basis.
  • The per-student budget multiplier has been adopted as an inflation-adjusted $167.
  • The “Funding Floor” will increase from $9,200 to $25,000 for districts with less than 150 students.
  • Districts will only need to provide student counts once every budget cycle and student counts will be based on full-time enrollment.
  • Equipment transfer rules have been loosened.
  • No new eligible services have been added.

The New Jersey School Boards Association has partnered with E-Rate Consulting, Inc. to help school districts and member charter schools throughout New Jersey fully leverage the opportunities available through the Schools and Libraries Program of the Universal Service Fund, more commonly known as E-rate. Learn more about the program.

NJSBA is also collaborating with the national nonprofit Education Super Highway to make robust internet a reality for all schools in the state through the New Jersey K-12 Broadband Initiative. Assistance and resources through the initiative are offered at no cost to school districts. More information is available.

Alyssa Cubello is marketing manager for Education Superhighway

Skip to toolbar