Most E-Rate Funds Spent in Highest-Need Areas, Researcher Says
In fiscal year 2024, the program spent 62 percent of funding on broadband subscriptions and 35 percent on networking gear
WASHINGTON, Aug. 17, 2026 – Most funds under the Federal Communications Commission’s E-Rate program go to schools and libraries in lower income areas, a recent analysis found.
The program provides discounts on broadband and telecom services to schools and libraries, and spends about $2.5 billion annually. The program provides discounts to participants based on the percentage of students that are eligible for free or reduced-price lunch.
Hari Narayanan, a data scientist who publishes broadband adoption research at his site BroadbandClusters, found that in fiscal year 2024, 77 percent of the program’s funding went to the highest-need schools and libraries.
The FCC is currently conducting a review of E-Rate and taking input on altering the program, including questions about limiting funds to rural areas or even subsetting the program.
The FCC’s highest need threshold requires 75 percent or more of students in those schools or school districts to qualify for free or reduced lunch. Participants in that category get up to 90 percent off broadband access subscription and 85 percent off networking gear.
There were 11,869 schools and libraries in the highest need category in FY2024. In the zip codes around them — which don’t always exactly match the school district they each serve — 28.5 percent of households lack home broadband and 18.2 percent of households lack a large-screen device, Narayanan found using 2024 Census Bureau data.
Those are both higher than the nationwide figures, just 4.5 percent of households reported lacking a broadband connection in the Census’s 2024 survey.
In addition to questions about consultant certifications and expanding filtering requirements, the FCC's proposal asks whether the program’s mission has been achieved given the expansion of broadband infrastructure to nearly every school in the country
“In establishing the program in 1996, Congress was addressing a specific problem: limited access to advanced telecommunications and Internet services in schools and libraries,” the agency wrote. “Given the substantial expansion of broadband access in schools and libraries over the last three decades, we seek comment on whether and to what extent the E-Rate program has fulfilled that mission and whether continued funding is consistent with Congress’s original objective.”
The FCC also cited concerns about excessive screen time for students.
Schools and libraries are nervous about the prospect of reduced E-Rate funding. The Schools, Health & Libraries Broadband Coalition urged members Friday to submit comments in the FCC’s docket, which opened the same day.
Narayanan found many areas that get some of the most E-Rate funding are not rural. The city receiving the most funds was New York, at $137 million, with Los Angeles and Chicago at the third and fourth most.
Alaska’s Lower Kuskokwim School District received the second most, at $96.6 million, and serves many remote and rural villages in the state.
Other cities getting more than $20 million in E-Rate funding included Houston, Amarillo, and San Antonio, Texas, plus Columbia, South Carolina, and Montgomery, Alabama. The only other rural area was Unalakleet, Alaska.
E-Rate supports more than 96 percent of all public schools in the U.S.
In FY2024, the program spent 62.1 percent of its money subsidizing broadband subscriptions. Another 35.4 percent was for networking gear to connect school buildings and campuses, like Wi-Fi access points and routers.
At the Mountain Connect conference last week, a school district technology director said the biggest impact of lost funding might be on the equipment side.
Tim Miles, tech director for Colorado’s Steamboat Springs School District said rural broadband prices have fallen significantly over the years as fewer and fewer true monopolies remain.
But networking gear to support those subscriptions was getting more expensive, he said, and was something schools would likely forgo maintaining or replacing without the subsidy.
“It’ll negatively affect school districts,” he said. “The device cost to run a network inside of a building is drastically rising. That’s where it really helps, the subsidies for schools.”
