Schools and Libraries (E-Rate)

Step 3 Applying for Discounts

Updated September 2015

Calculating Discounts

Discounts are calculated and reported to USAC in the "Discount Calculation" section of the FCC Form 471. You will update the entity information in your organization's EPC account, and the system will populate the appropriate data in your FCC Form 471 and perform the calculations detailed below.

Types of Entities

Following is information on how to calculate discounts for different types of entities.

School District

In general, the school district calculation is the basis for discount calculations for all types of entities. To calculate the discount for a school district:

  • Determine the total number of students eligible for the National School Lunch Program (NSLP) in the entire school district.
  • Determine the total number of students in the school district.
  • Divide the first number by the second number to get the percentage of students eligible for NSLP in the school district.
  • Using this percentage and the urban or rural status of the school district, find the appropriate Category One and Category Two discount for the school district in the discount matrix.

Voice services are subject to a phase down of 20 percentage points per year starting with Funding Year (FY) 2015. For example, a school district that is eligible for an 80 percent discount for Category One services will be eligible for a 60 percent discount on voice services for FY2015 and a 40 percent discount on voice services for FY2016.

Each school and each eligible non-instructional facility (NIF) shares the school district discount. If only one school in the district receives a service, or that service is shared among all or a subset of schools in the district, the discount does not change.

Individual School

An individual school that is part of a school district does not calculate its discount based on its own student population.

An independent school – a school that does not share a common board with other schools and is individually responsible for its finances and administration – would follow the school district calculation method above, using its student population numbers and the urban or rural status of its physical location.

Library System or Library Consortium

To calculate the discount for a library system: 

  • Determine the total number of students eligible for the National School Lunch Program in the public school district in which the main branch of the library is located.
  • Determine the total number of students in that school district.
  • Divide the first number by the second number to get the percentage of students eligible for NSLP in that school district.
  • Using this percentage and the urban or rural status of the library system, find the appropriate Category One and Category Two discount for the school district in the discount matrix.

Voice services are subject to a phase down of 20 percentage points per year starting with FY2015. For example, a library system that is eligible for an 80 percent discount for Category One services will be eligible for a 60 percent discount on voice services for FY2015 and a 40 percent discount on voice services for FY2016.

Library Outlet or Branch

Each library outlet/branch and each eligible library NIF shares the library system discount. If only one library outlet/branch in the library system receives a service, or that service is shared among all or a subset of library outlets/branches in the library system, the discount does not change.

Consortium or Statewide Application of Schools and/or Libraries

To calculate the discount for a consortium or statewide application:

  • List each member of the consortium or statewide application together with its discount as calculated above.
  • Add the discounts and divide by the number of members.

Keep the following in mind:

  • Consortia and statewide applications do not have an urban or rural status. The discount is a simple average of the member discounts, whether each individual member has an urban or rural status.
  • For Category Two funding requests, use the Category Two discount for each member (which cannot exceed 85 percent) when calculating the discount for a consortium or statewide application.
  • The discount for a consortium or statewide application applies to all services requested on the application, whether one member, a subset of members, or all members share the service.
  • Voice services are subject to a phase down of 20 percentage points per year starting with FY2015. For example, a consortium or statewide application that is eligible for an 80 percent discount for Category One services will be eligible for a 60 percent discount on voice services for FY2015 and a 40 percent discount on voice services for FY2016.
  • Consortium and statewide applications are the only applications that can have a discount that does not appear on the discount matrix (e.g., 72 percent, 45 percent, etc.) because the consortium or statewide discount is a calculated average of the member discounts.
  • If the discount calculation results in a decimal, round down to the nearest whole number for decimals less than 0.5 and round up for decimals equal to or greater than 0.5 (e.g., 74.4 becomes 74, 62.5 becomes 63).
School or Library Non-Instructional Facility without Classrooms

A non-instructional facility (NIF) is a school building without classrooms or a library building without public areas. A school NIF that does contain classrooms is still treated as a NIF. When eligible for support, school NIFs receive the same discount as the school district and library NIFs receive the same discount as the library system.

The discount for a NIF is derived from the school district or library system regardless of the physical location of the building. NIFs are not counted in the district or system’s urban/rural determination.

New School Construction

You must first determine whether you know the population of students that will attend the school. If you know which students will attend the new school, calculate the discount for that individual school as described above. Schools and school districts can provide a reasonable estimate of the number of students who will be attending a school under construction during a particular funding year and seek support for the estimated number of students who will be attending. Once the student population is known, you may update the discount calculation based on the actual student population during Program Integrity Assurance (PIA) review. In order for your discount calculation to be updated with the actual student population, you must notify PIA before your funding commitment decision notification is issued.

New Library Construction

For a new library, calculate the discount as described above under library outlet or branch using the student information from the public school district in which the main branch of the library is (or will be) located.

Head Start, Pre-kindergarten, Juvenile Justice, or Adult Education

You must first determine if the students and/or facilities in these programs are eligible in your state using the Eligibility Table for Non-Traditional Education. If they are eligible, calculate the discount for an individual school (or a NIF with classrooms as appropriate) as described above. All Head Start students that meet the age requirement are considered eligible for NSLP.

Schools with Changing Student Populations

Some schools offer instruction to students drawn from other schools, and the student population in those schools may vary throughout a school year. Examples of these types of schools include some magnet schools, vocational schools, outdoor education facilities, and career centers.

To calculate their discounts, individual schools with changing student populations that are part of a school district use the district’s discount rate.

Alternative Discount Mechanisms

For schools that either do not participate in NSLP or choose not to use NSLP participation numbers, there are certain acceptable alternative discount mechanisms that can be used to calculate an equivalent measure for the percentage of students eligible for NSLP. In all cases, these mechanisms must be based on or not exceed the same measure of poverty used by NSLP.

As above, applicants using an alternative discount mechanism must maintain accurate and complete documentation of the calculations that support their funding requests. Remember that documentation must be retained for at least ten years after the last date to receive service.