2025 E-Rate Insights: Policy Updates & School Funding Opportunities with Joe Pillo

Jason Pufahl  00:12

Welcome to CyberSound. I’m your host, Jason Pufahl, joined today by Michael Grande from Vancord and Joe Pillo from E-Rate First. Hey guys! 

Joe Pillo  00:20

How you doing, Jason? 

Jason Pufahl  00:21

Good, so Joe, you joined this, if you can believe it, two years ago, January 3rd of 2020 was when you were on the last podcast.

Joe Pillo  00:31

That’s awesome. It seems like yesterday, right? Guys, we just talked about this.

Jason Pufahl  00:36

So we’re doing something a little bit different. And just as a refresher for folks, we we realize that we now have over four years of content that we have produced, and there’s a there’s a lot of good topics out there, and in particular, there’s definitely topics that are still really relevant, but may have changed some in the past, you know, two or three years since we had that last episode. So we wanted to bring you back, Joe, you were on, actually, Episode 68, E-Rate and School Reimbursement Funding two years ago. And, you know, it is the start of the 2025 application season. So we know that that, you know that’s relevant to folks. And we’ve got an in, you know, an incoming presidential change which may potentially impact funding one way or the other. So really want to talk about, what does 2025 look like a little bit, and probably do a little bit of a 101 on E-Rate for folks who may not be as familiar with it.

Joe Pillo  01:34

Excellent guys. Well, thanks for having me on again, Jason and Michael, this is a great opportunity always to get in front of people just to give that E-Rate 101, to reiterate how important it is for all schools and libraries nationally to file for this. They’re all earmarked funding for this, and we all pay into this fund. It’s actually the largest technology funding source for schools and libraries. It’s at, I think it’s $7.2 billion right now annually that all schools get back on their internet access, internal connections, and basic maintenance costs yearly. So it’s it’s tough, because you need to file various forms, just like any other government program to get this money to release it, and it’s all based on bidding, and there’s rules and regulations and what’s eligible, and that changes yearly. So it’s a topic no one wants to discuss but knows they have to do, just like filing taxes, unfortunately. But if you do it right, you really can take advantage of it, stretch your dollar, the schools or the library’s dollar further and get you know your best return on the program by, you know, implementing and increasing both technology, security speeds to the end user, being really the student. That’s what we care about. And so that’s how I fit that mold is, I help those schools and libraries our team file and manage this program on their behalf. 

Michael Grande  03:04

So Joe, E-Rate is essentially a function of USAC, which is then sort of funded by the FCC. Is that correct?

Joe Pillo  03:14

The Universal Service Administrative Company. It’s an outsourced firm that it’s kind of a pseudo agency, and that is actually one of the things you guys hit the point on, and it has come up, is it, are they allowed to make rules and regulations on behalf of the government without, you know, formally having a vote on it? Andthat’s in Congress right now, that issue,

Michael Grande  03:38

And the two primary pieces that sort of the referred to. I guess it’s category right? Category one, which is bringing internet to the school, and category two, which is then distributing it throughout the districts, into different schools. 

Joe Pillo  03:52

Perfect, it’s that every year you get your internet access costs reimbursed, and it’s based on a percentage. So every year you have, everyone has that monthly cost, it should get that reimbursement based on that cost, and that’s bringing it to the various buildings. If you have various buildings, both the schools, libraries and admin buildings, so anything that has to do with educating the student, those sites are eligible and that cost to that building is eligible, and they don’t put a cap on that for those things. And that’s category one. Category two is that, like you said, the internal connections distributing the internet throughout the building to that end user. And that would be basically, you think about it as like switches, routers, firewalls, UPS, wireless access points, all the devices used to distribute that internet cleanly and as fast as possible to that end user.

Michael Grande  04:11

And and the is there a formula that’s sort of used by by the by USAC, when it’s coming up with certain I know that it’s needs based, but I you know sometimes certain clients, maybe nonprofits, maybe independent schools, that’s where they have questions on how that’s done, tax on that. 

Joe Pillo  05:04

So the schools, most school districts, you know, they they participate in the national free, free lunch program. So they have this data. Every school nationally does so. So they have this, hey, we’re either hiring a based on that free reduced lunch figures, which is income based, and they get a higher discount based on that. It goes into a kind of a bracket of, you know, based on that percentage, how much you actually get back from the program. But many nonprofits don’t know how to get around that because they don’t participate, but you could do financial aid applications, surveys is usually an easy one, and it’s really basic. It’s just really showing, is there a need financially, and based on that student population, what is that need? And that’s what you’re trying to flush out, and it’s pretty straightforward and easy to do so, but I know that’s usually the stumbling block for nonprofits that have a state licensed school,

Michael Grande  06:00

Yeah, and that’s, and that was one of the points I think we wanted to key on, is making sure it’s not underutilized by certain eligible organizations. Sorry,

Joe Pillo  06:08

Unfortuantely, the smaller schools they get left on the side of this and think they can’t find that’s both, Catholic schools, you know, private schools, because they don’t do that NSLP, they do financial aid, but they don’t know that how to go about doing that, and a lot of special needs schools, juvenile justices, stuff like that. They don’t know, how do I go about doing this? Because I can’t just easily show that from the state. 

Jason Pufahl  06:30

And that, my question was going to be certainly along that line. But more, do you find that there are entities that actually are eligible for this, but that but don’t know that they are? 

Joe Pillo  06:40

100%, I have a client in Chicago, Easter Seals. It’s just, you know, off the just thing, off the top my head. They didn’t know they are eligible, but they have four head starts. And in their state, in Illinois, it is eligible head starts. So last seven years, we actually been filing for them. They obviously do other things. And most of these agencies, you know, do all different types of things, not just education, right? They do all the, you know, things for the parents, job placement, or whatever they do if they have a licensed school, head start, anything like that, that could be eligible if it the state says so. When you’re licensed with the state, then you’re eligible for E-Rate.

Jason Pufahl  07:21

Perfect. Thank you.

Michael Grande  07:23

And so, you know, as as it relates to we talked sort of through what category one, category two meant, yes. And some of the uses of the program, you know, are there, are there any other, maybe new things that have happened, maybe now in 2025 and looking forward?

Joe Pillo  07:40

To go back to the category two, there’s also many services where you have these costs. A lot of these smaller schools and Catholic schools, they don’t have the budget to have an on site, full time technology staff. So a lot of them do outsource that function because it’s cheaper. They don’t have to pay, you know, all the health insurance and all that stuff that can be eligible, and a lot of times is and they’re not aware of that. So that cost that they pay that entity to just manage their equipment could be an eligible service, and they would get that discount off of that eligible service. And so many forget that that’s a huge portion of it, and could be used for the new year, the only real difference is that they’re allowing Wi-Fi and busses and and off campus use for Wi-Fi. So I do have a lot of special needs schools that are like the or distance learning. If they have the they’re allowed to take a hot spot home that’s eligible. And because, you know, you it’s the homework app, they were trying to close, right? So, you know, everyone has internet, but if you have some, some students that don’t have access, well, they can’t do the work. And as you know, everything now, you have to be connected to do that. And, um, that all started all with the COVID, ECF program, which I’m assuming you guys talked about in the past week. You’re, you’re, you know, with everyone joining us, but I don’t want to go on a tangent about that program on top of it.

Michael Grande  09:06

Understood.

Jason Pufahl  09:07

So, the limitation for for home network access, I’m assuming, they can’t have something that’s more permanent, like, like fiber or cable or something?

Joe Pillo  09:16

Great questions, um, no, it’s weird. It’s just hot spots only they’re sticking to. Now that’s going to be the big issue going forward with the new administration coming in, one of the points that they’re going to have, because they the Republicans, did not want it to cross that public right away from the school district or school side. And it’s never been that way. It’s 26, or seven years of E-Rate, and it’s been like once it crosses that public right away, it’s not eligible. And so this as of the COVID programs, emergency connectivity funds, the first time that they opened that up. So students, obviously, we all had a distance learn. They had to have streaming services and video, so they had to get out devices and also those hot spots. But. Basically to every student nationally.

Jason Pufahl  10:01

Do do you, Michael, I don’t know if you were going to ask this or not. But do you anticipate significant changes now? Post, post January 6, you know, what are we looking at? Has there been much room?

Joe Pillo  10:14

There’s, there’s some, you know, intriguing things on the board. It’s really the security aspect has been on the table for years, and probably the last 10 years, it’s, it’s come up of, like, okay, like, how do we use this funding for any type of security? Not in that could be physical security. It’s also digital, right? You’re any type of blocking, um, we have just, I’ve encountered many schools that have been hacked, have been held up ransom, and LA Unified was, I think, two years ago, had a huge case, and that case really opened up the floodgates of like, we got to do something about this, and we don’t have the budget. That cost is not going away, and it’s not going down, and it’s getting trickier and trickier, and so all it takes is a little mistake on the end user. And, you know, but not everyone has these huge budgets to pay for this stuff, and so they’re doing a pilot program to introduce cybersecurity that it’s the cybersecurity program to they introduce, to try to offset some of these costs and see what everyone’s seeking and would like to use to really help stop that, and it’s it’s going to grow, and there’s no way to get rid of it,

Michael Grande  11:24

Yeah, my, my only contribution to that is understanding that we’ve worked with, you know, several clients on applications in the pilot program, and I know that that window closed in November of 24 and a lot of the questions were, well, this is helpful, right? But similar to ECF, 

Joe Pillo  11:41

Was ordered this million dollar program that, I think $3 billion applications come in. So it shows that there’s that huge need. 

Michael Grande  11:48

There’s a need, yeah, and my my concern, I guess. But just to tie it into sort of short term thinking and long term solution is, you know, ECF was wonderful, and it put one to one devices in a lot of hands of a lot of people that need our school systems, but it left a funding gap moving forward, because you get to the end of the life cycle of some of these things, which are maybe at best, four years, and you now need to do full replacement. You have no warranty coverage. You have licenses that expire. And now you’ve, you’ve also now introduced this from a security perspective, uh, where costs only escalate year over year. So, you know, I, my question was really about, do you see, you know, 3 billion in application, 200 million in funding? Do you see a point at which this is going to be made permanent, and a permanent part of this program?

Joe Pillo  12:41

Great question, this is something that I actually was kind of angry about, is that they put out the pilot, and it’s a three year pilot, so that tells me, okay, well, they’re gonna roll this eventually into E-Rate, but that means for the next three years, they’re not gonna do anything with everyone else for the money. So it’s like, great. It’s a great step, but it’s, it’s eight years too late, like they should have done that years ago when everyone was asking for it, and it’s great that they’re, they’re moving forward with it, and I do believe it’s going to get rolled up. It almost has to, because basic firewall protection alone is such a small piece of the licensing and stuff you need. You see why these companies are like, top 50 companies in the in the US that are trading right now are like all these large and as it’s all, it’s all relative based on size your cost, right? So huge districts have up to a million dollars of just license fees for these firewalls and and the smaller, it’s not like, it’s, a little piece of the puzzle. It’s a huge portion of your budget that you have to like now have to set aside, or you leave yourself vulnerable to that stuff.

Michael Grande  13:51

I sort of have a question. It may tie a few things together, which is, let’s say I’m an organization that has participated in the past, or maybe didn’t know I was eligible, but, but I found out that I am eligible, and maybe I missed a prior cycle, but now we’re going into a new cycle, and I can meet some level of a means test. What happens to the money? You know, Is there money sort of sitting in a tranche that I have access to? Is it something?

Joe Pillo  14:19

Well, it’s a use it or lose it type stuff so everyone, there’s no retroactive. I would like to go back. Unfortunately, just like all government programs, they want to, you know, because of waste, fraud and abuse, they put this package together saying, well, if it’s been in this package, then we can make it eligible and watch it. Obviously, there’s those that try to get around it, but it’s all based on bidding. So the whole program is based on bidding these, these various services and products that you would like to seek funding for. So it’s a reimbursement program. Remember, it’s not here’s money and great here, and if you spend it or not, it’s I have these costs I’m seeking. I’m going out to bid for these costs that I’m going to incur. I’m then also filing for reimbursement and hoping to get that reimbursement for it. But remember, this is a guaranteed funding source, though, so if you get you have costs for internet, you’re guaranteed based on that cost. It’s not a grant. So everyone gets confused with that. It’s not like, oh, I hope we can qualify. If you’re a school, you qualify. If you have students, you qualify. And you should expect the money yearly. It’s just filing correctly to get that money. That’s the big issue. And like you said, the biggest thing is, like, how do I prove I’m eligible? How do I get in that, you know, like, identified as an eligible location to get the end result of get that funding every year. And it’s a process, and there’s ways to get there, but if you’re with the state and you have a license in Connecticut, it is from head start to K through 12, you’re eligible, and you should be filing every year. 

Michael Grande  15:57

Ok, I have one last question, and it’s an easy one, just about sort of deadlines, important deadlines for folks to keep in mind. I think we’re in January right now, so I feel like we’re coming up on the beginning of the cycle. 

Joe Pillo  16:09

You know, cycle started a little early. They started earlier. And a lot do like to file super early. And I it’s tough because we’re filing technically for service to begin July 1. So if you’re bidding eight months ahead of time for a widget, whatever it may be, the cost in the product, model numbers are going to change by the time you know. So I usually like to start. I we prep everything at our team, all of our schools and libraries. We’re in actually 44 states that we do this for, and we go through all of the, hey, where they were last year? What’s their budgets, how much they have? Know more about it, about their program, everything about it, before we go into the application cycle. So you see, hey, this is what you had last year. This is what your contracts were. Even if it’s a new client or potential, I would know all that, because it’s all public record. It’s all publicly posted. So I see everything filed last year, what they have and what’s earmarked for the school or library by the government, you know, through this program, based on their student council. And so I’ll know those numbers and know what they can take advantage of. And we go over, hey, what’s eligible this year? That’s different, what, what? And you go through the list of, like, we used to call it your wish list. Now it’s like, you know, you’re I would love, you know, I wish I have this money to do these things. These are the things I’d like to do. So let’s bid it. Now, when you go through this the process which is coming up now the oh, I don’t, unfortunately, don’t let me grab the date. So everyone has that too, but it’s, you know, you want to make sure that you have enough time to bid everything in time, assess those bids, properly, identify, you know, those needs based on that bid, and then file that next application. So the second application really drives the first application. So the second deadline drives the first deadline is you have to keep the bid open 28 days. And show the filing the the second deadline technically opens on the 15th of this month and closes on the 26th of March.

Jason Pufahl  18:15

March. Okay, so it’s a long it’s a long opportunity. Then, yeah, so too. 

Joe Pillo  18:20

if you’re just starting, if someone’s clean and new and is like, I don’t I hear you right all the time. I don’t know, the drop dead possible day that they could actually start the and be in window would be then February 26 is the last day they could go out to bid, okay? But like, if someone called me on the 25th technically, you could, you could get it in, right? But you rather not be rushed to make decisions on that application. But anyone that’s listening to you guys today about this, it’s you want to file. You’re guaranteed to get the money. You just got to follow the process and make sure that you know, hey, you’re getting your fair share out of the program. Um, great. If you actually look at your cell phone bill, you everyone pays into the fund, right? There’s like $1 to the USF fund you’ll see as a line item forever that you’ve paid into.

Jason Pufahl  19:12

Gotcha well, so that that’s super helpful, Joe, I appreciate you joining. I’m glad that our timing, we our timing was good, such that people still have plenty of opportunity to actually apply for this, and they haven’t missed any deadline. So the information is certainly relevant. Look forward to what the upcoming year brings with relative to E-Rate, but thanks for refreshing, you know, sort of refreshing this for everybody, so that you know we’re all starting the same page.

Joe Pillo  19:38

Yep, anytime you know, you anyone wants to get a hold of us or just have, we have a lot of we have a lot of free advice, a lot of questions, a lot of accounts, you know, you know they have to do it for themselves, which is fine, but we do give a lot of and that’s why you guys, you know, we work well with you guys in the past, because it’s just like, making sure, like, I don’t really care, it’s if they use us or not. It’s more like they all should be filing it benefits the student that you have there. Why don’t if you don’t file it’s, I see it as being lazy. Either file it internally or find someone that can help you file it, but you’re guaranteed to get those funds back. And obviously, there’s not an agency you guys probably work with that has unlimited funds to just do it. 

Jason Pufahl  20:20

So yeah, though that. I mean, that’s great. And you know, we’re, obviously, we’re in the free advice business as well, doing this podcast. So so we’re aligned. It absolutely is. It is Joe, Michael, thanks for joining today. You know, if anybody has questions, of course, reach out to us. We can put you in contact with Joe. We might be able to answer some of the rudimentary actually, that’s not true. Michael, could probably answer some rudimentary questions.

Joe Pillo  20:41

We might save you some time. Instead of some time instead of trying to figure it out. Yeah, that’s right, 

Jason Pufahl  20:45

I talk a lot more on these, and I think it’s evident today that this is not in my wheelhouse. So everybody, thanks for listening. As always, we appreciate that you did, subscribe to the podcast and look for more content coming soon. Thank you.

Joe Pillo  20:59

Great. Thanks. Great one.

21:02

We’d love to hear your feedback. Feel free to get in touch at Vancord on LinkedIn and remember, stay vigilant. Stay resilient. This has been CyberSound.