Schools and Libraries (E-Rate)

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Step 3 Applying for Discounts

Updated April 2018

Category Two Budget

Equipment and services eligible for universal service Schools and Libraries (E-rate) Program discounts are divided into Category One (C1) and Category Two (C2).

Starting in Funding Year (FY) 2015, each school or library receiving C2 support has a five-year, pre-discount budget for those products and services based on the number of students in the school or the number of square feet of the library branch (outlet). (There is no budget for C1 services.)

  • The first year that an eligible school or library receives E-rate Program support for C2 services and equipment will be the first year of its five-year budget.
  • A school or library can decide if it wants to spend all of its C2 budget in one year or if it wants to use the budget over any of the five years.
  • Eligible C2 products and services for each funding year are included in the annual Eligible Services List.
  • Each school or library can receive discounts on eligible C2 equipment and services up to its pre-discount budget amount.

C2 Budget Tool

The C2 Budget Tool includes information on FY2015, FY2016, and FY2017 C2 budget calculations and commitment information. It does not have information on pending FCC Form 500 requests, pending appeals, or pending funding requests, but can be used to assist applicants trying to plan for their spending. See the Category Two Budget Tool User Guide for additional information.

Which entities have C2 budgets?

Each individual school and each library outlet/branch has a C2 budget. School districts and library systems cannot average their costs across multiple school or library budgets.

Non-instructional facilities (NIFs) do not have C2 budgets. If a NIF is essential for the effective transport of information to or within a school or library, the applicant must allocate the cost of the eligible product or service associated with the connection through the NIF to the entities benefiting from the service. However, costs specific to the NIF itself must be cost-allocated and removed from any C2 funding request.

  • School NIFs are school buildings or buildings on school property that generally do not have classrooms - e.g., administrative buildings, school bus barns and garages, cafeteria offices, and facilities associated with athletic activities. However, even school NIFs that have classrooms do not have C2 budgets.
  • Library NIFs are library buildings or buildings on library property without public areas - e.g., administrative buildings, bookmobile garages, interlibrary loan facilities, and library technology centers..

How do I calculate the C2 budget for a school?

To calculate the C2 budget for a school, multiply the number of students who attend the school by the C2 multiplier for the appropriate funding year. To calculate the number of students who attend the school, add the total number of full-time students to the number of peak part-time students (if any). The number of peak part-time students is the greatest number of part-time students at a single point during the school day, not the total number of part-time students that attend the school during the course of the entire school day.

The C2 multiplier for schools was set at $150.00 in FY2015 and is increased for inflation for each subsequent year. If this calculation results in a figure below the budget floor allocated for that funding year, the C2 budget for the school is the budget floor.

If a student attends more than one school (e.g., if the student from one school attends a vocational training school each afternoon), both schools can count that student for the purpose of calculating their respective C2 budgets.

How do I calculate the C2 budget for a library?

First, add up the total square footage for all floors occupied by the library outlet and enclosed by the outer walls of the library branch (outlet), including those areas off-limits to the public. This is the same floor area data annually collected by the Institute of Museum and Library Services (IMLS). Libraries cannot include patios or other outdoor spaces such as parking lots unless they are enclosed by the outer walls of the library.

Bookmobiles should be counted like any other branch - count the area enclosed by the outer walls of the bookmobile. Generally, a bookmobile's C2 budget will be the budget floor.

To calculate the budget for a library, multiply the total area of the library in square feet, including all areas enclosed by the outer walls of the library and occupied by the library, by the C2 multiplier for the appropriate funding year. The C2 multiplier for libraries was set at $2.30 or $5.00 (depending on IMLS Locale Code) in FY2015 and is increased for inflation for each subsequent year. If this calculation results in a figure below the budget floor allocated for that funding year, the C2 budget for the library is the budget floor.

How are the C2 budgets adjusted by inflation each funding year?

Entity Type

FY2015 Pre-Discount C2 Budget Calculation

FY2016 Pre-Discount C2 Budget Calculation

FY2017 Pre-Discount C2 Budget Calculation

FY2018 Pre-Discount C2 Budget Calculation

Schools

(Total number of students) x $150.00

(Total number of students) x $151.50

(Total number of students) x $153.4695

(Total number of students) x $156.231951

Libraries with IMLS Locale Codes 11, 12, or 21

(Total square feet) x $5.00

(Total square feet) x $5.05

(Total square feet) x $5.11565

(Total square feet) x $5.2077317

All Other Libraries

(Total square feet) x $2.30

(Total square feet) x $2.323

(Total square feet) x $2.353199

(Total square feet) x $2.395556582

 
Budget Floor $9,200.00 $9,292.00 $9,412.80 $9,582.23

What time period does my C2 budget cover?

C2 budgets are subject to a five-year cycle beginning with the first funding year in which you receive support for C2 services or equipment. However, the budgets can be used as needed, and schools and libraries are not required to use one-fifth of their budgets each funding year.

  • For a school district, the first year of the C2 budget for ALL of the individual schools in the school district is the first year in which ANY individual school in the school district receives a positive commitment from USAC on a C2 funding request.
  • For a library system, the first year of the C2 budget for ALL of the individual library branches in the library system is the first year in which ANY library branch in the library system receives a positive commitment from USAC on a C2 funding request.

Can my C2 budget change from year to year?

Yes, your budget could increase or decrease from one funding year to the next.

  • Your budget could increase from the budget from the previous funding year if your student count increases or you build an addition to your library, or it could decrease if your student count decreases or you downsize the internal area of your library.
  • For existing schools, if you have used your entire budget for FY2017 and your student count for FY2018 decreases, you do not have to repay the money disbursed in excess of the C2 budget.
  • For new schools or new construction, however, if you overestimate your student count and exceed the five-year pre-discount budget the next funding year, you must return any funds disbursed in excess of the actual discount amount calculated from the allowable budget.

Remember that the amount of funding available for a funding year is impacted by commitments featuring your school or library for all funding years within your five-year cycle. These commitments could be featured on an application you file or an application filed on your behalf, such as a consortium application.

How is the cost of services counted against my C2 budget?

On the FCC Form 471, each applicant will allocate the cost of the C2 services and/or equipment to the entities sharing the services and/or equipment. Each amount allocated to a particular school or library will count against the C2 budget for that school or library.

Remember that your C2 budget is based on the pre-discount cost of the products and services allocated to your school or library. A change in your E-rate program discount percentage from year to year does not affect the amount of your C2 budget.

For additional information about C2 Budgets, see the C2 Budget FAQs.