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Sizing up the New E-rate Funding Cap

The FCC increased the annual E-rate funding cap to $3.9 billion yesterday.

What does this really mean? For starters, it means that the available funding next year will be closer to the actual demand. In prior years, there has been a huge gap between the connectivity needs within schools and libraries and the E-rate program’s ability to meet those needs. More funding will allow many more students and library patrons to benefit from the crucial broadband connections that the E-rate program is designed to help deliver.

E-rate Funding Demand vs Funding Cap

For me, any number involving billions is hard to conceptualize. Therefore, another way to think of E-rate funding is to consider how much money is available per student nationwide. We estimate that in FY2014 there were 51.9 million students listed on E-rate funding applications. (See page 3 of this analysis.)

Max Per Student E-rate Support

This equates to a maximum of $46.53 support per student in 2014. Compare that to the new number. Assuming a flat increase of $1.5 billion to the overall fund – without any additional inflation adjustment or rollover – and there will be a maximum of $75.45 support available per student in 2015.

This number is interesting to me for several reasons. First, it shows that the FCC’s increase is a significant increase. Going from $46 to $75 per student is quite a jump – a long overdue, fiscally conservative, and probably still-not-enough, but greatly appreciated jump.

There is something else that stands out to me when I look at the new annual spending cap of $75.45 per student: it is an incredibly small amount of money compared to the thousands that are already invested in students each year. The E-rate funding cap represents about one-half of one percent of annual education spending in America. It is a tiny fraction of our nation’s investment in education; yet I believe the E-rate program can have a huge, positive effect on every aspect of K-12 education today. Schools (and libraries) are being transformed for the better by broadband connectivity – and the E-rate program is now front-and-center in that transformation.

The FCC has done its part this week to improve the outlook for education in America. Now it is up to the gifted professionals in our nation’s schools and libraries to answer the call: to rise to the challenge of deploying broadband in classrooms and library buildings all over our country with the help of the newly modernized and reformed E-rate program.

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