E-Rate · Category 2 Budgets

Category 2 Budgets and the Five-Year Cycle

Category 2 funding doesn’t reset every year. Each applicant gets one pre-discount dollar budget to cover internal connections for an entire five-year cycle — which means a single planning mistake early in the cycle can leave a district short when it needs a refresh later.

The Current Cycle: FY2026–2030

USAC resets the Category 2 budget formula at the start of each five-year cycle. For the cycle covering funding years 2026 through 2030, the per-student multiplier and funding floor are:

$201.57
Per-student multiplier for schools, FY2026–2030 cycle
$30,175
Funding floor applied to schools and libraries with very small enrollment
5 years
Cycle length — the budget is locked to enrollment at time of application and spans the full cycle

These figures apply to the FY2026–2030 cycle only. USAC recalculates the multiplier and floor at the start of each new cycle — verify current figures at usac.org before finalizing any budget plan.

How the Budget Is Calculated and Spent

A school district’s total pre-discount Category 2 budget is its enrolled student count multiplied by the per-student figure, with the funding floor applied if that calculation falls below the floor amount. Library systems use a comparable calculation based on the population or square footage they serve. The budget is locked at the time of application and does not adjust mid-cycle if enrollment changes significantly.

Applicants can draw down their five-year budget across multiple funding years within the cycle rather than spending it all at once — useful for districts that want to stagger a wireless refresh in year one and a firewall replacement in year three, for example. What they cannot do is exceed the total budget across the cycle, or carry unused budget into the next cycle once it resets.

Because the budget is fixed for five years, the most expensive mistake a district can make is spending on equipment that doesn’t match its actual refresh cycle — either overspending early and having nothing left for a mid-cycle failure, or underspending and letting outdated switches and access points sit past their useful life while budget goes unused.

Plan Your Five-Year Budget Correctly the First Time

Armorstack models your Category 2 budget against your actual equipment refresh timeline before you commit any of it.