New Economic Study: Eliminating E-Rate Would Cost the U.S. Economy $4.2 Billion a Year

SHLB economic study, conducted by The Brattle Group and released at AnchorNets 2026, finds every $1 cut from E-Rate would reduce GDP by about $1.60

WASHINGTON, D.C. (Oct. 8, 2026) – E-Rate generates substantial economic benefits that extend well beyond the schools and libraries receiving support. Eliminating it would have significant negative effects on the U.S. economy, according to a new economic study released today by the Schools, Health & Libraries Broadband (SHLB) Coalition and coalition partners. The analysis, conducted for SHLB by independent economic consulting firm The Brattle Group, estimates that removing roughly $2.6 billion in annual E-Rate support would reduce annual real GDP by about $4.2 billion, or about $1.60 in lost economic activity for every $1 of support removed.

The findings arrive as the Federal Communications Commission (FCC) considers whether E-Rate, which has provided affordable broadband to schools and libraries for nearly 30 years, should be terminated, narrowed or limited to rural areas only. Public comments in the proceeding are due Oct. 13, 2026.

"The FCC is asking whether America can afford E-Rate. This study shows America can't afford to lose it. For every dollar of E-Rate support removed, the study released today estimates about $1.60 in lost economic activity." said Joey Wender, Executive Director of the SHLB Coalition. "If E-Rate ends, the cost of connectivity doesn't disappear. It lands on schools and libraries, and they will have to pay for internet access by cutting teachers, counselors and programs. Protecting E-Rate is an investment in our communities and in the economic opportunity these institutions create."

Key findings

• Eliminating E-Rate's roughly $2.6 billion in annual support would reduce real GDP by about $4.2 billion, real wages by about $2.8 billion and tax revenues by about $1.5 billion each year.

• Eliminating Category 2 funding alone, which supports internal Wi-Fi and networks, would cut about $1.2 billion in support and reduce GDP by roughly $2.5 billion.

• The South and West received the most E-Rate funding from FY2021 through FY2025. Average annual funding was about $999 million in the South, $786 million in the West, $454 million in the Midwest and $361 million in the Northeast.

• Because the South receives the most support and has the highest ratio of E-Rate funding to education output, it would see the largest losses in GDP, labor income and tax revenue.

• The economic loss exceeds the federal support removed because higher connectivity costs leave less money for other productive activities, and those effects ripple through suppliers, labor markets, household income, consumer spending and tax revenues.

As the report explains, "Because broadband has become an essential educational input rather than a discretionary expenditure, schools and libraries are unlikely to eliminate connectivity altogether. Instead, many institutions would be forced to reallocate scarce resources away from other educational priorities to maintain broadband services."

The report concludes: "There may be broader market failures in education that lead to underinvestment in educational resources generally. The FCC, however, is charged with communications policy rather than education policy. Within that mandate, E-Rate allows the FCC to address one specific dimension of the broader under investment problem—inadequate investment in communications and broadband infrastructure. Thus, even if E-Rate cannot correct all of the market failures affecting educational investment, it can help ensure that underinvestment in connectivity does not further constrain the production of educational services. Eliminating E-Rate without an offsetting source of education funding would reverse that relief, tightening schools’ overall budget constraints and forcing greater tradeoffs between connectivity and other educational services, leading to significant economic loss."

The study was supported by AASA, The School Superintendents Association; American Library Association (ALA); Association of Educational Service Agencies (AESA); Association of School Business Officials International (ASBO); Consortium for School Networking (CoSN); InnovateEDU; National Coalition for Technology in Education & Training (NCTET); National Rural Education Association (NREA); and Software & Information Industry Association (SIIA).

“E-Rate is essential infrastructure for today’s public schools,” said Noelle Ellerson Ng, Chief Advocacy & Governance Officer at AASA, The School Superintendents Association. “Schools cannot simply disconnect from the broadband networks that power teaching and learning, safety, cybersecurity, and daily operations. Reducing E-Rate would not eliminate those costs—it would shift them onto school districts and force tough choices about other investments in students. This report makes clear that protecting E-Rate is an investment in schools, communities, and the broader economy.”

“SHLB’s report shows that the FCC can’t cut E-Rate without a negative impact to our economy,” said ALA Chief Advocacy Officer Lisa R. Varga. “Public and school libraries foster literacy, a bedrock of economic growth, and offer every American the chance to develop skills that power our nation’s economy. The roughly 75 percent of public libraries that receive E-Rate funding will find ways to pay the bills, but the cost will inevitably impact resources and programs, ranging from book collections to basic coding classes to testing for GEDs and professional certifications. Americans cannot afford for the FCC to disinvest in broadband for our nation’s libraries and schools.”

“E-Rate is foundational to the work of educational service agencies and the school systems we support,” said Joan Wade, Executive Director at the AESA. “Reliable, affordable broadband is essential to delivering educational services, supporting school operations, and ensuring students and educators can access the tools and resources they need. Reducing E-Rate support would not reduce the need for connectivity—it would shift significant costs onto the local schools and regional educational services agencies that serve them. This report underscores that E-Rate is an investment in the infrastructure, services, and opportunities that support students and communities across the country.”

“E-Rate is essential for sustaining school connectivity and helping districts meet growing instructional, technology, and operational demands to provide all students with a high-quality education,” said James Rowan, CAE, SFO, CEO/Executive Director, ASBO International.

“Today’s schools depend on reliable broadband to support teaching and learning, school operations, school safety, cybersecurity, and student success. If E-Rate support is reduced or eliminated, schools will still need connectivity, but they will be forced to pay for it by redirecting resources from staffing, programs, and other critical priorities. This research underscores that E-Rate is an essential and effective federal investment in helping schools prepare students for success in a connected world,” said Keith Krueger, CEO, CoSN.

“This analysis confirms that E-Rate is an economic engine, not a discretionary subsidy,” said Erin Mote, CEO of InnovateEDU. “When we force schools to absorb billions in connectivity costs, we are robbing our communities of essential educators and resources. Disinvesting in E-Rate means actively disinvesting in America’s future workforce, with our most under-resourced districts bearing the heaviest economic burden.”

“E-Rate helps ensure that a student’s access to opportunity does not depend on whether they live in a rural community,” said Melissa Sadorf, Executive Director at the NREA. “Reliable broadband is essential to modern education, and rural schools should not be asked to absorb the full cost of infrastructure they cannot do without. This report highlights the importance of E-Rate and emphasizes how reducing E-Rate would put pressure on already-stretched school budgets and risk widening the connectivity divide for rural students and communities.”

“This study, released by the Schools, Health & Libraries Broadband (SHLB) Coalition, affirms our longstanding position that E-Rate funding is critical,” said Sara Kloek, Vice President of Education and Youth Policy, the SIIA. “By bridging the digital divide for under-resourced schools and libraries, E-Rate delivers a tangible economic impact and is a critical tool to equip the next generation with the skills needed to fuel America’s prosperity.”

E-Rate serves not just the recipient schools and libraries, but the broader surrounding communities,” said Debra Kriete, South Dakota E-Rate Coordinator and Member, State E-Rate Coordinators’ Alliance. “For nearly thirty years E-Rate has been a vital resource for connecting students, educators and library patrons to online resources and learning throughout the country.  E-Rate is needed to continue facilitating online broadband connectivity for schools and libraries, so that all the connectivity gains and associated digital literacy of the last three decades will be available to both present and future students, educators and library patrons.

SHLB presented the findings today at AnchorNets 2026 and will submit the report to the FCC's E-Rate proceeding ahead of the Oct. 13 comment deadline. With the evidence now on the table, SHLB urges every school, library and community that depends on E-Rate to tell the Commission what losing it would cost them, using the tools at SaveOurERate.com, before Oct. 13. The full report is available at SaveOurERate.com.

Media Availability
Joey Wender is available for interviews. For more information, visit www.shlb.org or follow @SHLBcoalition on LinkedIn, Facebook or X.

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About SHLB: The SHLB Coalition is a nonprofit, 501(c)(3) advocacy organization that supports open, affordable, high-quality broadband connections for anchor institutions and their surrounding communities. The SHLB Coalition is based in Washington, D.C., and has a diverse membership of commercial and non-commercial organizations across the United States. To learn more, visit www.shlb.org.