What’s next for E-rate?

The E-rate filing window for funding year 2019 closed on March 27, with more than 21,000 schools, libraries, and consortiums from across the country submitting funding requests. “The more than 69,000 requests filed represent both Category One and Category Two, which account for nearly $2 billion and almost $1 billion in requests, respectively,” says Brian Stephens from Funds for Learning. “Funding requests for Category One declined for the fourth year in a row, but requests for Category Two funding increased significantly, by about $400 million. This is a trend we’d like to see continue.”

Stephens attributes the continued decline in Category One requests to the phase-out of support for voice services, as well as a reduction in costs for data transmission services and Internet access. Schools can achieve comparable connectivity with a smaller investment, a real benefit to typically cash-strapped organizations, he says.

The $400 million boost in Category Two requests may be a result of timing. “We experienced three years of declining requests, so this increase is very positive,” Stephens says. “We attribute the growth primarily to pressure felt by schools at the end of their Category Two five-year budget cycles to use funds while they’re available.”

What happened to my E-rate application?
Your application is under review. The Universal Service Administrative Company, or USAC, administers the E-rate program. As applications for E-rate funds are submitted, they undergo a process called Program Integrity Assurance, which usually involves a Q&A-style dialogue between the applicant and USAC as the application is assessed. Common questions typically validate:

School enrollment and the number of students eligible for the National School Lunch Program

An applicant’s Category Two budget status to ensure alignment with budget requirements

The costs and eligibility of products and services for which discounts were requested

Let the “waves” begin
Once the review is complete, an application is designated as “wave ready.” USAC issues its funding decisions in regular groups called “waves.” Funds for Learning’s Brian Stephens notes that in past years, USAC made funding decisions quickly and that the organization is seeing the same pattern this year as well. In funding year 2018, the first wave was issued on April 20, with subsequent waves weekly thereafter. All decisions should be issued by September 1, the FCC deadline for applications that meet submission requirements.

What can I expect next year?
The FCC hasn’t announced any substantial changes to the E-rate program for funding year 2020, and Brian Stephens from Funds for Learning notes that no structural changes are expected. So what should we watch for?

A formal decision on regulatory changes to the current five-year budget cycle, which is especially important for those schools and libraries that are reaching the end of their eligibility

The possible elimination of the current Category One amortization requirement, which mandates that special construction costs exceeding a designated threshold be spread out over a number of years.

An updated eligible services list as USAC solicits comments as to what types of new products and services should be eligible in funding year 2020.

What can I do if E-rate won’t fund my entire solution?
Have you exhausted the E-rate funds available to your school? Did you miss the filing deadline? Or, are you just looking for other sources to help fund your digital learning initiatives?

You’re not alone: 84 percent of E-rate applicants report that funds from the program are not sufficient to meet their needs. We know that E-rate will only fund certain technologies, and, as a discount program, it requires that you provide matching funds for projects. Successful schools and libraries budget for matching funds and identify grants and other programs to help make up the difference. Here are a few alternative funding options:

Grants
There are countless grant programs available to fund your technology projects. While many of these grants are not specifically “technology grants,” they are open to funding technology as a way of meeting the grant priorities. Some of the grant programs are competitive, while others are formula grants, such as Title I-Part A funding. Be sure to consider competitive and formula grants at the federal and state levels and look at foundations that provide grant funding to K-12 institutions. For more information, visit the Cisco Grants and Education page here.

Bonds
Through either general obligation or technology-specific bonds, schools can fund their technology projects, both big and small. General obligation bonds are for building and modernizing facilities, but you are often able to include technology projects while the walls are open. Technology-specific bonds are just that: They specifically address the tech needs of the district. While bonds vary from state to state and from district to district, they are another way to fund your technology projects.

Cisco Capital
Cisco Capital is a wholly owned subsidiary of Cisco Systems, specializing in providing innovative financing solutions for Cisco customers across the globe. More than just a finance company, Cisco Capital offers you competitive and flexible financing, supporting your education goals and technology needs now and in the future. Technology financing may help you in many ways. From conserving cash and preserving credit, to providing fixed payments and cash-flow management, financing is here to make sure you are staying up to date and help you avoid technology obsolescence.

Cisco Capital is not a one-size-fits-all way of financing; they can work with you to discover which options will best meet your needs. Learn more about Cisco Capital here. Please note, while you cannot finance your E-rate projects using Cisco Capital, this is a great option for your non-E-rate projects.

Cisco Refresh
Another way to maximize your IT budget is through our price-competitive Cisco Refresh program for Certified Remanufactured products. This fully warrantied and licensed gear is eligible for Cisco services and Smart Net Total Care support and can be ordered just like you would new equipment, directly from our authorized partners and distributors. Cisco Refresh offers a large pre-owned inventory—from latest generation to end-of-sale models—available for immediate shipment.

Also, Refresh equipment supports your green initiatives, giving you the quality products you expect with a fully sustainable low carbon footprint. Instead of turning to risky unauthorized brokers, buy with the confidence that you are purchasing the best and most secure Cisco technology. And, just like it does with new equipment, Cisco Capital is ready to fund Cisco Refresh purchases. Learn more about Cisco Refresh here.

So, What’s Next?
Planning for innovation at your school is a year-round exercise. Revisit your vision and validate your goals and priorities to identify the technologies that align best. As you think about funding, remember that a comprehensive funding strategy, which considers all the options mentioned in this post, is one of the most important elements of implementing a successful digital learning plan. Find out more about Cisco and E-rate here.