FAQ

The Funding Year begins on July 1st and ends on June 30th of the next year and is known for the year it begins. Thus, Funding Year 2024 begins on 7/1/2024 and ends on 6/30/2025.

Funding Years can also be known by the number of years from the start of the program, with "Year 1" in 1998. So, Funding Year 2024 might also be known as "Year 27." 

Eligible services are broken into two categories. Category 1 services include Data Transmission and Internet Access. This includes fiber projects to connect your sites through a Wide Area Network (WAN), as well as direct internet connections between your hub and Internet Service Provider.

Category 2 services include Internal Connections, Basic Maintenance of those connections or Managed Internal Broadband Services. Eligible equipment for these services include routers, firewalls, switches, wireless access points and controllers, cabling (fiber and copper), and battery backup.

The FCC phased out support for telephone and voice services from 2015 to 2019. Therefore, telephone lines, long distance services, cell phones and hosted voice over IP services are no longer eligible.

E-Rate offers two options for invoicing, Billed Entity Applicant Reimbursement (BEAR) and Service Provider Invoice (SPI).

• BEAR - The applicant pays the entire cost of the project directly to the service provider, and then files for reimbursement for their discounted portion. So if a project costs $100,000, and the applicant discount is 80%, then the applicant would pay the service provider for the full amount of $100,000 and would file a Form 472 (BEAR) to receive $80,000 reimbursement from the E-Rate Program.
• SPI - The applicant pays a discounted invoice, $20,000 in the above case, and then the service provider files a Form 474 (SPI) for the remaining $80,000.

In both cases, the service provider is paid in full, while the applicant pays only their share. We recommend the BEAR method for monthly recurring services (Category 1) and SPI method for larger, non-recurring costs (Category 2).

All documentation should be kept on file and accessible for at least 10 years after the last date to receive services, in case of an audit. 

The FCC introduced the Category 2 Budgeting process in 2015, eliminating the Two-in-Five Rule that had been in place up til then.

• Starting in Funding Year 2015, applicants received a finite budget of $150/student at each school, to be spent on Category 2 Equipment and Services. That budget was increased by about 1% each year until Funding Year 2020. 
• For Funding Year 2020, a 6th year was added to this method and the per student budget was increased to $195/student. 
• The budget amount was meant to span the entire period. It did not renew each year. Instead, the budget was calculated using current enrollment and then spending from previous years was substracted to determine available budget.

Starting in Funding Year 2021, the FCC has changed the process again. 

• The new multiplier of $167/student will be calculated using 2020-21 student enrollment and will not change for the next 5 years.
• Budgets are now disctrict-wide and not allocated on a per school basis. So, the applicant can allocate funding as necessary, in any eligible entity.
• At the end of this 5-year period (Funding Year 2026), the multiplier will be increased according to inflation and student counts will be updated for the next 5-year period.

Equipment may be transferred to another eligible entity, i.e. school or library, 3 years after installation. You must maintain a record of the transfer and notify USAC.

5 years after installation, the equipment can be traded in or disposed of.

Beginning in Funding Year 2021, however, you may transfer equipment between sites at any time, without notifying USAC of the transfer, though you must still maintain a record of the transfer.