The E-Rate discount matrix, explained.
The E-Rate discount matrix is a 10-cell grid that determines how much of an applicant's eligible costs USAC will reimburse — between 20% and 90%. The percentage is based on the applicant's National School Lunch Program (NSLP) eligibility band and whether the applicant is classified as urban or rural.
The matrix
Find the applicant's NSLP eligibility band on the left, then read across to the urban or rural column. The cell shows the percentage of eligible costs USAC will fund.
| NSLP eligibility | Urban | Rural |
|---|---|---|
| 1–19% | 20% | 25% |
| 20–34% | 40% | 50% |
| 35–49% | 50% | 60% |
| 50–74% | 60% | 70% |
| 75–100% | 80% | 90% |
Petrol shading scales with discount intensity. Source: FCC E-Rate discount matrix as currently published by USAC. Verify the authoritative current matrix on the USAC Discount Calculation page before relying on these values for a specific filing.
How to read it: a worked example
A school district reports 65% NSLP eligibility and is classified as rural. Cross-reference: 50–74% NSLP × Rural → 70% discount.
On a $100,000 eligible Category 2 contract, USAC funds $70,000 and the district funds the remaining $30,000 (the non-discount share). Category 2 funding is also subject to the applicant's five-year Category 2 budget cap.
How NSLP percentage is determined
Historically, applicants reported their NSLP percentage directly on Form 471 — the share of students eligible for free or reduced-price lunch under the National School Lunch Program.
Districts in Community Eligibility Provision (CEP) status use a CEP-derived rate. Some states have moved to alternate measures of economic need. USAC publishes the current acceptable methods on its Discount Calculation page.
Urban vs rural classification
Urban / rural is determined at the school or library level using U.S. Census Bureau urbanized-area definitions. A district can have both urban and rural schools; in that case the discount is calculated by averaging the school-level discounts.
The full classification rules — including how bordering rural schools and library outlets are handled — are documented in USAC's Discount Calculation guide.
Libraries and consortia
A library or library system uses the discount of the school district where it is physically located, adjusted for community-need indicators where applicable. A library in a rural district inherits the rural classification; a library in an urban district inherits the urban one.
Consortia use a weighted-average calculation across member entity discounts. The weighting reflects the share of pre-discount eligible costs attributable to each member.
Common questions
- What's the maximum E-Rate discount?
- 90%. It applies to applicants in the 75–100% NSLP eligibility band that are classified as rural.
- What's the minimum E-Rate discount?
- 20%. It applies to applicants in the 1–19% NSLP eligibility band that are classified as urban.
- Does the same discount apply to Category 1 and Category 2?
- The discount percentage is the same. The difference is the cap — Category 2 funding is capped per applicant on a five-year budget cycle, while Category 1 has no per-applicant budget cap.
- How is the NSLP percentage determined for Community Eligibility Provision (CEP) schools?
- Schools and districts in CEP status use a CEP-derived rate (typically the identified-student percentage multiplied by a USDA-published factor). USAC publishes the current method on the Discount Calculation page.
- Are libraries eligible for the same matrix?
- Yes. A library or library system uses the discount of the school district in which it is located, with adjustments for community-need indicators where applicable.
Filter Form 470s by discount band and category.
ERateSignal indexes every certified Form 470 with its applicant's discount profile, so you can scope alerts to the bands you actually sell into.
This guide summarizes publicly available FCC and USAC guidance for educational purposes and is not legal or procurement advice. The discount percentages shown reflect the current published matrix; verify the authoritative current version with USAC before relying on it for a specific filing. ERateSignal is not affiliated with, endorsed by, or sponsored by USAC, the FCC, or the U.S. Government.