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FY 2014 Demand Analysis: Part 2 – Impact of Discount Rates on P1 Services

On May 16, 2014, Funds For Learning® submitted our FY 2014 P1 Demand Analysis to the FCC, a report on current school spending for telecommunications services and Internet access. Our analysis was designed to help answer two fundamental questions:

  1. What do schools spend each year on telecommunications and Internet access?
  2. What drives cost variations between schools?

E-rate funding applications provide a clear window into school spending. But discovering the underlying factors that influence costs is a much harder question to answer. Over the course of the next month, Funds For Learning® will begin to tackle the questions above via a four-part series that dives deeper into our analysis, shedding light on the data and debunking several E-rate myths along the way.

Part 2 – Impact of Discount Rates on P1 Services

The schools serving the poorest communities in America pay an average of $0.93 per student each month for P1 services (telecommunications and Internet access). Leveraging the E-rate discount program, these schools receive monthly telecommunications and Internet services valued at $6.54 per student.

Schools serving the wealthiest communities pay an average monthly bill of $1.57 per student for P1 services. Including E-rate discounts, these schools use, on average, $2.98 per student in monthly telecommunications and Internet access.

Monthyl School P1 Per Student - by school E-rate discount rate

The range of monthly out-of-pocket expense per student only varies a small amount, from $1.57 down to $0.93 per student; however, because of the E-rate discount matrix, the schools serving the most economically disadvantaged families are able to receive a much higher-value service.
Looking at monthly out-of-pocket expense by location shows a smaller difference. City schools pay an average of $1.04 per student each month. Rural schools pay $1.36 per month.
Monthyl School P1 Per Student - by school locatio
NOTE: These charts do not include the data for New York City Board of Education or Remote Rural Alaska schools.
School out-of-pocket expenses do not vary significantly based on the discount rate of applicants. No matter the discount rate, or the location of a school, you can expect that it is probably paying between $1.00 and $1.50 per student each month for telecommunications and Internet access. The E-rate program discount matrix simply allows schools serving the poorest families to multiply their buying power to receive a higher value service for their schools.
Next Week: Part 3 of our analysis will look at the impact of school size on telecommunications and Internet access expenditures.
Below are tables showing the average annual per student expenditures by discount rate and location. The tables show the total value of services received, the school out-of-pocket expense, and the amount of E-rate discounts requested per student. Annual and monthly numbers are provided for convenience.
FY2014 School Telecommunications and Internet Access Expense
FY2014 School Telecommunications and Internet Access Expense
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