E-rate spending reveals schools’ tech evolution

Schooling has changed in many ways in the last two years, but while remote learning, mask policies and increased federal spending in education have gotten lots of attention, another trend has gone nearly unnoticed.

But thanks to the availability of detailed E-rate data, this sea change is now being recognized. E-rate is the federal government program that provides discounts of up to 90 percent for schools and libraries to bring high-speed internet into their building(s) and create internal networks for online access. For years, E-rate applicants have leveraged E-rate to bring fast internet service into their organizations, cobbling together funds and seeking out providers. But today, a new trend is emerging—more funds are being requested to improve internal networks, allowing the flood of devices now used in schools and libraries to effectively get online.

E-rate funding requested in Category One, which includes data transmission services and internet access, has declined for five straight years, largely a function of increasing marketplace competition and decreasing per-megabit prices.  But funding requests for Category Two services have soared in the same time period. Category Two funds can be spent on wireless access points, network switches, data cabling and other resources essential for on-campus connections.

E-rate Applicants Add Devices, Concentrate on Bolstering Internal Networks

This significant change is a natural outgrowth of all the devices that are used in schools after districts went remote for at least part of the pandemic. Pre-pandemic, 45 percent of schools reported having a computer for each student, according to a National Center for Education Statistics report on the 2019-20 school year. At least one more recent study said this figure nearly doubled to 86 percent as schools scrambled to give students devices to allow remote learning.

The need for infrastructure to support all those devices is evident in the E-rate funding data. In 2018, there was a $1.5 billion gap between Category One and Category Two, with about $2.6 billion requested in Category One. With Category One funding requests decreasing slightly and Category Two funding requests increasing dramatically, the gap has been rapidly decreasing. In funding year 2022, the expenditures for the Category One and Category Two are nearly even.

This vital information from the 2022 filing window will help district leaders better plan their E-rate strategy in the future.

Let’s look a bit deeper at these trends and understand what they show. In funding year 2019 and funding year 2020, the average total cost for Category Two services was relatively flat at slightly more than $20,000 per school or library site. But in funding year 2021, expenditures jumped to $26,500 per site in funding year 2021 and then rose again to $32,000 per site in funding year 2022.

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