By Sam Rawdon, Grants Development Associate (K-12 Education)
With school districts facing tight budgets alongside an increased reliance on Internet connectivity for learning purposes, the Universal Service Administrative Company’s (USAC) E-Rate program has proven to be quite beneficial. E-Rate assists schools and libraries in purchasing affordable high-speed Internet access and telecommunications. This program, under the authority of the Federal Communications Commission (FCC), has been utilized by nearly every K-12 school district in the United States throughout its 28-year history. In fact, with an annual funding cap of $4.94 billion, schools and libraries requested $3.2 billion in E-rate funding in Fiscal Year 2024 alone. The utilization of the E-rate program by K-12 schools, especially those in rural and high-poverty areas, has allowed these communities to afford quality Internet access, supply high-performance networks, and support the expansion of digital learning.
In July 2024, the 5th U.S. Circuit Court of Appeals ruled the FCC’s method of providing E-rate funding through its Universal Service Fund (USF) unconstitutional, with the argument being the FCC violated the Consitution’s nondelegation clause based on the separation of powers between the three branches of government by granting a private non-profit organization the power to administer federal funds. Two separate cases challenging this have been taken to the Supreme Court of the United States (SCOTUS), and arguments are anticipated to be made in March or April 2025.
This turn of events has left the future of the E-Rate program in a state of uncertainty. If SCOTUS sides with the 5th U.S. Circuit Court of Appeals’ July ruling, many K-12 schools will have to reassess their budgets, leading to certain financial chaos for many, especially those in rural and economically disadvantaged areas. If SCOTUS rules against the USF and E-Rate, it is not likely the effects will be felt immediately, as it would take several months for the program to end. Due to E-Rate’s bipartisan support, Congress will likely work to pass legislation to replace E-Rate, especially due to constituents’ high demand and reliability of the program in the K-12 sector.
It is currently unclear whether SCOTUS will side with the ruling or not, and a decision is not expected to be made until June or July 2025. As of the writing of this article, schools are still able to apply for and take advantage of E-Rate funding in 2025. K-12 schools should not panic but should prepare for the potential ending of E-Rate. One major action item is for K-12 school districts to speak to their respective Congressional representatives to help them understand the merits of the program and what it means to them, not only from an operational standpoint but also from the perspective of how E-Rate has allowed them to provide quality education to their students.
With many K-12 schools across the country leveraging E-Rate monies for their Internet connectivity and telecommunications needs to deliver educational services, the idea of the program shutting down is cause for concern for many K-12 schools. From a financial perspective, district budgets may need to be completely reworked to allow ample funding for continued access to reliable and affordable Internet. In a worst-case scenario, funding may need to be cut for these services, leaving K-12 schools unable to deliver key learning services. While it is premature to expect the E-Rate program to end since SCOTUS will not make a final ruling on the future of E-Rate funding until the summer, now is the time for K-12 schools to voice their support and concerns to Congress by elaborating on the benefits E-Rate provides to their communities.