Report: Schools Throwing Away E-rate Funds

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Schools and other organizations that tap the federal E-rate program are leaving about a quarter of all committed funds unused, according to a new report released this week by Funds For Learning, a firm that provides consulting services to E-rate applicants. The analysis showed that this amounts to "tens of millions of dollars" in unused funding annually.

According to FFL, "The E-rate program provides $2.25 billion annually to help schools and libraries obtain technology funding, but it appears that a significant portion of those funds is not being spent."

The re4port shows significant variation year by year in terms of the amount of committed funding utilized. From 1998 to 2001, utilization hovered between 77 percent of committed funds and 83 percent. But from 2002 to 2006, this dropped to between 68 percent and 73 percent. This amounts not just to tens of millions of dollars but hundreds of millions. In 2006, for example, with commitments of $1.99 billion, some $540 million went unused. In 2004, about $730 million went unused.

The report cited four factors for this underutilization:

  1. The amount of time after the start of the funding year when the applicant receives a funding commitment;
  2. Price reductions by service providers; and
  3. Overestimation of needs for technology; and
  4. A lack of understanding of rules or deadlines.

The full report, "E-rate Utilization Issues: Defining the Issue and Its Causes," can be downloaded from FFL's site here.

About the Author

David Nagel is the executive producer for 1105 Media's online K-12 and higher education publications and electronic newsletters. He can be reached at dnagel@1105media.com. He can now be followed on Twitter at http://twitter.com/THEJournalDave (K-12) or http://twitter.com/CampusTechDave (higher education). You can also connect with him on LinkedIn at http://www.linkedin.com/profile/view?id=10390192.

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