E-rate funding restarts, but crisis continues

Abstract

Following a nearly four-month suspension of E-Rate Program payments, the federal organization that administers such payments has restarted issuing letters promising funds to schools and libraries around the country. The E-Rate Program has come under intense scrutiny for alleged fraud and abuse, and in August, government officials halted payments under the program based on revised accounting requirements. A number of school systems and libraries depend on E-Rate funds to provide basic computer services and connectivity, and at least one school district in Alaska shut down Internet service this summer because of concern that the E-Rate funds would end. Under the new rules, E-Rate letters cannot be sent until the funds they promise have been collected. The former system allowed letters to be sent after applications were approved, prior to collection of the funds, because the monies would not be disbursed for 12 to 18 months. The new regulation has resulted in a logjam in sending commitment letters and funds. Efforts in Congress have thus far failed to streamline the process.