Changes to federal funding system could gut local K-12 technology budgets

A federal program that provides between $2.5 and $4 million annually to help cover broadband, data transmission and network hardware costs to North Dakota schools and libraries is potentially on the chopping block, raising concerns among educators across the state. 

The Federal Communications Commission (FCC) released a draft of what is being reviewed with the E-Rate system in early June, followed by a draft for public comment in mid-August.  The program helps increase connectivity for schools by providing discounted internet service and hardware. 

If changes or a repeal of the program take place, both large and small public and non-public schools across the state could be impacted, with local and state governments potentially on the hook to cover the costs. 

“(This will) truly hit any school, but our large schools particularly hard,” said Aimee Copas, executive director of the North Dakota Council of Education Leaders. 

North Dakota received $2.6 million last year, $2.9 million the year before, $3.6 million in 2023, and $4.1 million in 2022 under the E-Rate program. The amount going to individual schools averages around $30,000 per school, with some larger systems getting much more. 

Bismarck Public Schools, for example, on a five-year cycle, gets around $350,000 to $780,000 through E-Rate, said BPS Superintendent Jeff Fastnacht. 

“So is that significant? Absolutely,” Fastnacht said. “For us to have to collect that, is there an impact to taxpayers? Absolutely.” 

For Fastnacht, the E-Rate system helps provide reduced rates for connectivity, comparable to getting reduced rates for an electric bill or a water bill.

“It's just operational. It's just what we do to operate anymore,” Fastnacht said. 

The E-Rate program provided around $10.5 billion to public and non-public schools across the country between 2021 and 2025 and is one of the top five federal programs in dollar amount used by schools. 

The E-Rate program came into being in 1996 when former President Bill Clinton signed the bipartisan Telecommunications Act. A year prior, only 8% of public school classrooms had internet access, National Center for Education Statistics data shows. That figure jumped to 93% of public school classrooms by 2003, the NCES data found.

“They’re all worried a little bit, because it is big money,” said David Skogen, E-Rate coordinator for the state. “Especially the small schools, it’s about the only way they can upgrade their networks.”

Skogen said the system helps reduce costs for networking systems by 20% to 85%, with schools on different rates depending on their free and reduced-price lunch rates. Over the past five years this came out to a benefit of around $201 per student, he said. 

Currently, this covers around 63% of the networking costs, with the state picking up the rest. 

For equipment, Skogen said funding helps cover costs for “everything behind the jack in the wall other than servers.” 

There’s some discussion that a lot of this may end up just being political grandstanding, with certain politicians trying to raise pressure on schools to cut screen use in school, and that few changes or cuts would actually go through, members of the national School Superintendents Association (AASA) said during a webinar NDNC attended Sept. 9. 

“We don't use any of that money to buy devices or put screens in front of kids,” Fastnacht, who serves on the AASA governing board, said in an interview with NDNC. “That's not where that money goes. For us, that money pays for connectivity. It pays for switches and routers. It pays for networking equipment for security.” 

Skogen felt the FCC moves are more to put pressure on the Universal Service Administrative Company, which administers the program, in an attempt to get better rates and streamline the system. 

Funding to E-Rate comes through universal service charges applied to landline and cellphone bills. 

NDNC reached out to several other larger school systems in Fargo, Grand Forks, and Minot, where administrators either declined to comment or messages and calls to them were not returned by the time of publication.