In Funding Year (FY) 2025, USAC removed a wide variety of products and services from funding requests because they did not qualify for E-rate support. The lesson is simple: don’t assume every item in a quote is eligible. During the Program Integrity Assurance (PIA) review, USAC carefully checks that every product and service meets the program’s eligibility rules, and in many cases applicants thought items were covered when they weren’t.
Before you certify your application, review each product and service carefully so you can avoid funding reductions and unexpected costs.
Small Changes Can Add Up
Most of the funding reductions in FY2025 were relatively small, but some were significant. The largest removal was $777,209 from a district’s Internal Connections request. The typical reduction was around $2,400, which shows even smaller eligibility mistakes can carry a financial cost.
USAC also frequently applied partial eligibility instead of removing an entire funding request. A product or service might be found 60% eligible, for example, meaning only that portion of the cost receives E-rate support. This often happens when a single line item includes both eligible and ineligible components.
So, review every item in a vendor quote. Don’t assume the whole package qualifies for funding.
What USAC Removed Most Often
Based on FY2025 PIA reviews, these were the most common types of products and services USAC removed for eligibility reasons.
Taxes and fees are their own common source of questions. For how to handle a PIA question about a tax or fee, see Fielding a PIA Question About a Tax or Fee? Start Here.
The Hidden Risk: Bundled Quotes
One important finding from the FY2025 data: many ineligible items were hidden inside bundled vendor quotes.
Roughly one in five removals were listed only by a manufacturer part number, with no plain-language description. You may never spot the ineligible item unless you review each line.
A single quote might combine eligible hardware with security subscriptions, cloud licenses, warranties, or other services that carry different eligibility rules. If you don’t catch those items before filing, USAC may reduce your funding during PIA review.
What You Can Do
You can lower your risk of funding reductions with a few simple steps before you certify your FCC Form 471.
- Review every line item instead of relying on the overall product description.
- Ask vendors to separate eligible and ineligible costs whenever possible. But don’t rely on vendor documentation. Confirm eligibility using the Eligible Services List.
- Verify software licenses, subscriptions, warranties, and bundled services against the current Eligible Services List (ESL).
- Pay close attention to manufacturer part numbers, since they can include features that aren’t eligible.
- When in doubt, ask before you submit instead of waiting for PIA review to catch it.
Final Thoughts
The FY2025 PIA data shows that eligibility issues are often more complicated than they first appear. Most funding reductions weren’t caused by obviously ineligible products like laptops or phone systems. Instead, they involved items commonly included in network projects, such as software licenses, security subscriptions, warranties, installation labor, and bundled services.
The good news: many of these reductions are avoidable. Review your vendor quotes line by line and verify eligibility before you file, and you can head off delays, funding cuts, and errors on your application.
Eligibility isn’t always black and white. Treat every line item as something to review, not something to assume.
Still not sure what’s eligible? Join our next My E-rate Guides (MEG) webinar on Thursday, August 6 and ask our Guides your questions live. Register now.
About the Author: Sheauna has been part of the Funds For Learning team for nearly five years and is based in Edmond, Oklahoma. Outside of work, she enjoys spending time with family and friends, and she puts real value on building strong personal relationships and making space for the people who matter most.
