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- Step 4: Applying for Discounts
- Calculating Discounts

Discounts are calculated and reported to USAC on Block 4 of the FCC Form 471. If you file online and follow the instructions, the calculations detailed below are performed for you based on the data you provide when you complete the form.

For a single entity receiving service – e.g., an individual school or a single library outlet/branch – you calculate a "site-specific" discount.

For a number of entities receiving a service – e.g., all the individual schools in a school district or all the library outlets/branches in a library system – you calculate a "shared" discount. To calculate the discount for an individual entity (recipient of service), you need two pieces of information:

- The urban or rural status of the entity, which you can determine using the physical location of the entity and the appropriate state urban or rural location information.
- The percentage of students eligible for the National School Lunch Program (NSLP) or an equivalent measure of poverty (see below).

You can then find your discount in the Discount Matrix posted on the USAC website. Locate the row that includes the percentage of students eligible for NSLP and find your discount in the urban or rural column, as appropriate.

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

Divide the number of students eligible for NSLP at the individual school by the total number of students at the school. Use this number (the percentage of students eligible for NSLP) and the urban or rural status of the school to look up the discount on the Discount Matrix.

Divide the number of students eligible for NSLP in the public school district in which the library outlet/branch is located by the total number of students in that public school district. Use this number and the urban or rural status of the library outlet/branch to look up the discount on the Discount Matrix. Note that while a library outlet/branch may serve more than one school district, it uses the student information from the public school district in which it is physically located for its discount calculation.

Prepare a worksheet in Block 4 of the FCC Form 471 that lists each individual school in the school district, then calculate the discount for each individual school as described above under "Individual school." Multiply the discount for each individual school by the number of students in that school (the "weighted product" for that school). Add all the weighted products and divide the result by the total number of students in the school district to get the "weighted average discount" for the school district.

Prepare a worksheet in Block 4 of the FCC Form 471 that lists each library outlet/branch in the library system, then calculate the discount for each outlet/branch as described above under "library outlet/branch." Add all the discounts and divide the result by the total number of outlets/branches in the library system to get the "simple average discount" for the library system.

Prepare a worksheet in Block 4 of the FCC Form 471 that lists each consortium member, then calculate the discount for each member as described above for that member type. For a school district or library system member, you will first complete a separate worksheet to calculate that member's discount. Add all the member discounts and divide the result by the total number of members in the consortium to get the simple average discount for the consortium.

A non-instructional facility or NIF is a school building without classrooms or a library building without public areas. Some school NIFs do contain classrooms (see below).

The discount for a school NIF without classrooms is the weighted average discount of its school district. The discount for a library NIF is the simple average discount of its library system.

If the student population in the classroom(s) is fixed (the same students are expected to attend class every day), use the calculation for an individual school as described above.

If the student population varies from day to day or over time, use a "snapshot" of the student population for the calculation. Choose a particular day and calculate the percentage NSLP eligibility for the student population in the classroom(s) on that day and carry that percentage eligibility into the Discount Matrix. Be sure to maintain accurate and complete documentation of the calculation.

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.

If you don't know which students will attend the new school, use the school district weighted average.

If you don't know which students will attend the new school and that school is not part of a school district, the new school will be eligible for a 20 percent discount in its first year – that is, until the student population is known. Once the student population is known, you may update the discount calculation based on the actual student population via the Receipt Acknowledgment Letter (RAL) and/or 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 Letter (FCDL) is issued.

For a new library, calculate the discount as described above under "library outlet/branch" using the student information from the public school district in which the new building will be located.

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. Note that all Head Start students that meet the age requirement are considered eligible for NSLP.

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, these schools can use the "snapshot" method described above under "School NIFs with classrooms." Remember to maintain accurate and complete documentation of your calculation.

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 five years after the last date to receive service.