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Category Two budgets: the FY2026–2030 cycle, explained

Last reviewed August 16, 2026 · Written by the team behind the E-Rate Wave tracker · Not legal advice — verify current rules with USAC.

Category Two (internal connections, managed internal broadband, basic maintenance) runs on five-year district-wide budgets. A new cycle began with FY2026 — and it reset every budget in the country.

The FY2026–2030 numbers

• School districts: budgets driven by a per-student multiplier (about $201.57 per student for the cycle).
• Libraries: about $5.43 per square foot.
• Every applicant gets at least the funding floor of $30,175 for the five years.

Figures are set by USAC for the cycle with inflation adjustments — check USAC’s C2 budget tool for your entity’s exact number.

The trap: first-year validation locks the budget

Unused FY2021–2025 money is gone

Unused budget from the previous cycle does not roll over. The FY2021–2025 cycle is closed; its leftover budget simply expired.

Form 500: putting committed money back in the budget

When a funded C2 request won’t be fully used — a project came in under budget, services were cancelled — filing an FCC Form 500 returns the unused commitment to the district’s C2 budget, where it can fund a future request within the same five-year cycle. It’s a step many applicants overlook, and skipping it strands money that could have been re-committed.