How Does E-Rate Work? What It Is and How Schools Qualify

E-Rate is the FCC’s Schools and Libraries Program. It discounts internet access and on-campus network equipment for eligible K-12 schools and libraries by 20% to 90%. To get support, an applicant posts FCC Form 470 for bids, waits at least 28 days, signs a contract, and requests discounts on FCC Form 471; USAC then reviews and funds the request.

E-Rate is paid for by the federal Universal Service Fund and administered by the Universal Service Administrative Company (USAC). This guide covers what E-Rate funds in 2026, who qualifies, how discounts are set, each application step, and what changed after the FCC removed hotspots and school bus Wi-Fi from eligibility. 

What is E-Rate and How Does It Work?

Administered by the Universal Service Administrative Company (USAC), E-Rate provides funding discounts to eligible schools and libraries, especially those in underserved areas, to help them afford high-speed internet and telecommunications services. E-Rate funding covers a range of technology expenses, categorized into two main service types:

1. Category One (C1) – Covers services needed to bring internet connectivity to a school or library, including broadband, fiber-optic networks, and basic internet access.
2. Category Two (C2) – Supports the internal infrastructure needed for Wi-Fi and connectivity within the school, including routers, switches, access points, and security services.

Funding is distributed based on need, with higher discounts for institutions in low-income areas or rural regions.

E-Rate Category One vs. Category Two at a glance

Kajeet note: Kajeet Connect Prime, a multi-carrier LTE/5G router that serves as a building’s main internet connection, is E-Rate eligible under Category One when it is the sole internet connection for a school or library building. Libraries can also use Category One support for wireless data service to their bookmobiles.

Who qualifies for E-Rate funding?

Public and private K-12 schools, libraries, and their groups must meet specific FCC eligibility requirements. The FCC calculates eligibility based on the percentage of students eligible for the National School Lunch Program and the district’s rural or urban status.

• Schools must be public or private K-12 institutions that operate as nonprofit entities. They must provide primary or secondary education and cannot be for-profit.
• Libraries must be independent or part of a public library system and eligible for assistance from their state library administrative agencies.

How are E-Rate discounts calculated?

E-Rate discounts range from 20% to 90% for Category One services and 20% to 85% for Category Two services. These are calculated based on the portion of students eligible for the National School Lunch Program and the district’s rural or urban status.

1. The Percentage of Students Eligible for the National School Lunch Program (NSLP) – Schools with higher numbers of low-income students qualify for larger discounts.
2. Location – Rural schools and libraries may receive higher discounts because infrastructure costs are higher.

What Changed in E-Rate for 2026?

Starting with funding year 2025, Wi-Fi hotspots for off-campus lending and Wi-Fi on school buses are no longer eligible for E-Rate. On September 30, 2025, the FCC voted 2–1 to reverse the decisions that had added them and directed USAC to deny pending FY2025 requests for both.

USAC confirms neither service is eligible for FY2026, and the FCC's June 30, 2026, draft FY2027 Eligible Services List is unchanged from FY2026. E-Rate also does not pay for end-user devices such as laptops or Chromebooks. FY2026 began a new five-year Category Two budget cycle that runs through FY2030.

If your district or library relied on E-Rate for hotspots, see what schools can do now that E-Rate hotspot funding is gone.

How Do Schools and Libraries Apply for E-Rate Funding?

It’s important to note that getting E-Rate funding isn’t automatic — to get E-Rate funding, you first have to apply for E-Rate funding! Applying for E-Rate funding involves several steps and requires careful planning. The annual process typically follows this timeline:

1. Register with USAC – Schools must obtain an Entity Number and a School Profile Number.
2. File FCC 470: Request for Services – This form is used to announce the services you are seeking from service providers. It must be posted on the USAC’s E-Rate Productivity Center (EPC) portal.
3. Evaluate Bids and Select Service Providers – Schools should review bids and select the most cost-effective option that meets their needs.
4. File FCC 471: Funding Request – Once schools choose a provider, they submit this form to apply for E-Rate discounts. Submit it online through the EPC portal.
5. Wait for Funding Decision – After reviewing the application, USAC will issue a decision.

Who Benefits from E-Rate?

E-Rate has transformed how schools and libraries provide digital access, bridging the connectivity gap for millions of students and patrons. By ensuring that even the most remote and underfunded institutions have access to broadband internet, the program supports equitable learning opportunities, digital literacy, and the integration of modern educational tools.

How Kajeet Helps Schools and Libraries Make the Most of E-Rate

For over 20 years, Kajeet has helped schools and libraries connect the nearly 25 percent of Americans without adequate Internet access at home.  For E-Rate, that starts with Kajeet Connect Prime, an eligible primary internet connection for rural or hard-to-wire school and library buildings. For needs no longer funded by E-Rate, Kajeet offers Wi-Fi hotspots, cellular Chromebooks, and school bus Wi-Fi through other funding sources, all managed through the Kajeet Sentinel platform with CIPA-compliant filtering.