Calculating Discounts

Discounts are calculated and reported to USAC on the FCC Form 471.

You will update the entity information in your organization’s E-Rate Productivity Center (EPC) account and the system will populate the appropriate data in your form and calculate your Category One (C1) and Category Two (C2) discounts as detailed below.

Types of Entities

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

• School District
• Individual School
• Library System or Consortium
• Library Branch (Outlet)
• Consortium or Statewide Application of Schools and/or Libraries
• School or Library Non-Instructional Facility
• New School Construction
• New Library Construction
• Head Start, Pre-kindergarten, Juvenile Justice, or Adult Education
• Alternate Discount Mechanisms

School District

In general, the school district calculation is the basis for discount calculations for all types of entities. To calculate the discount for a school district:

• Determine the total number of students eligible for the National School Lunch Program (NSLP) in the school district.
• Determine the total number of students in the school district.
• Divide the first number by the second number to get the percentage of students eligible for NSLP in the school district.
• Using this percentage and the urban or rural status of the school district, find the appropriate C1 and C2 discount for the school district in the discount matrix.

Each school and each eligible non-instructional facility (NIF) use the school district discount. If only one school in the district receives a service, or that service is shared among all or a subset of schools in the district, the discount level does not change.

Individual School

An individual school that is part of a school district does not calculate its discount based on its own student population, but instead uses the discount calculated for the school district.

An independent school – a school not affiliated financially or operationally with a school district – would follow the school district calculation method above, using its student population numbers and the urban or rural status of its physical location.

Library System

To calculate the discount for a library system:

• Determine the total number of students eligible for the NSLP in the public school district in which the main branch or main administrative office of the library is located.
• Determine the total number of students in that school district.
• Divide the first number by the second number to get the percentage of students eligible for NSLP in that school district.
• Using this percentage and the urban or rural status of the library system, find the appropriate C1 and C2 discount for the school district in the discount matrix.
• The Find Your Library Discount Guide can help you look up the benefits you may receive through the E-Rate program.

Library Branch (Outlet)

Each library branch and each eligible library NIF uses the discount for the library system’s main branch or main administrative office. If only one library branch in the library system receives a service, or that service is shared among all or a subset of library branches in the library system, the discount does not change.

Independent Libraries

An independent library acts as its own main branch and would follow the library system calculation method above.

Consortium or Statewide Application of Schools and/or Libraries

To calculate the discount for a consortium or statewide application:

• List each member of the consortium or statewide application together with its discount as calculated above.
• Add the discounts and divide by the number of members to calculate the average discount to use.

Keep the following in mind:

• Consortia and statewide applications do not have an urban or rural status. The discount is a simple average of the member discounts, whether each individual member has an urban or rural status.
• For C2 funding requests, use the C2 discount for each member when calculating the discount for a consortium or statewide application.
• A consortium or statewide applicant can choose to file multiple applications if all of its members do not share all services. The discount for a consortium or statewide application applies to all services requested on the application, whether one member, a subset of members, or all members share the service.
• Consortium and statewide applications are the only applications that can have a discount that does not appear on the discount matrix (e.g., 72 percent, 45 percent, etc.) because the consortium or statewide discount is a calculated average of the member discounts.
• If the discount calculation results in a decimal, round down to the nearest whole number for decimals less than 0.5 and round up for decimals equal to or greater than 0.5 (e.g., 74.4 becomes 74, 62.5 becomes 63).

School or Library Non-Instructional Facility

A non-instructional facility (NIF) generally is a school building without classrooms or a library building without public areas. A school NIF that does contain classrooms is still treated as a NIF. When eligible for support, school NIFs receive the same discount as the school district and library NIFs receive the same discount as the library system.

The discount for a NIF is derived from the school district or library system regardless of the physical location of the building. NIFs are not counted in the district or system’s urban/rural determination.

New School Construction

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 do not know which students will attend the new school, you can provide a reasonable estimate of the number of students who will be attending that school during a particular funding year and seek support for the estimated number of students who will be attending.

Once the student population is known, you may update the discount calculation based on the actual student population during Program Integrity Assurance (PIA) review of your application. 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.

New Library Construction

For a new library, calculate the discount as described above under library branch using the student information from the public school district in which the main branch of the library is (or will be) located.

Head Start, Pre-kindergarten, Juvenile Justice, or Adult Education

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 as described above. Head Start students that meet the age requirement are considered eligible for the NSLP. Early Head Start programs (i.e., for children under the age of three years old) are not eligible for the E-Rate program. Home-based pre-kindergarten and Head Start programs are also ineligible for the E-Rate program.

Alternative Discount Mechanisms

For schools that either do not participate in NSLP or choose not to use NSLP participation numbers, there are 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 the 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 at least ten years after the last date to receive service.