Internet connectivity funding for Indiana schools is in jeopardy. Here’s why.

This story was originally published by Chalkbeat.

Indiana schools could lose both state and federal funding they use to pay for internet connectivity, due to a proposed cut in the next Indiana state budget and an ongoing Supreme Court case.

The combined effect could wipe out around $40 million that supports installing and paying for the faster internet necessary to support growing classroom technology use, advocates say.

The loss of the funding could come at a time when Indiana schools are grappling with the end of federal pandemic funding, a smaller increase to state tuition support than in recent years, and possible property tax reform — all of which could leave them with fewer dollars for connectivity. Rural schools in particular could be affected, although the Indiana Department of Education’s annual tech plan survey shows that most of the state’s school districts still fall short of national recommendations for bandwidth capacity.

“Realistically, no district will forgo internet,” said Noelle Ellerson Ng, associate executive director for advocacy and governance at AASA, the Schools Superintendents Association. “It’ll come down to how much flexibility, how much liquidity do they have in their budget, or far more likely, what gets cut to cover that new shortfall.”

The federal dollars come from a fund known as the Universal Service Fund (USF). USF includes programs to support low-income households and rural health care providers. But E-Rate funds specifically are used by school districts to support one-time and ongoing costs like fiber installation and internet service. Generally, priority Category 1 funds support installing internet that serves the school, while Category 2 funds may support routers, firewalls, and other configuration costs inside the school.

Indiana schools received around $37 million in 2024 in federal E-Rate funding for internet connectivity. But a case before the Supreme Court challenges the legality of how this money is raised. A lower court has ruled that the law that created the USF unconstitutionally delegated power to raise the funds to the Federal Communications Commission, which in turn delegated that power to a private entity.

While E-Rate allocations are based on need, internet connectivity ultimately serves every student at a school, Ellerson Ng added.

“Without hesitation, E-Rate is singlehandedly credited for supporting schools coming online,” she said.

In Indiana, a smaller state grant of around $3.4 million also provides matching funds to schools receiving the E-Rate funding. But that grant was cut under a budget proposed by Gov. Mike Braun and passed by the Indiana House in February.

It’s up to Senate lawmakers to restore it in their version of the budget, which hasn’t yet been released, but must pass the Senate Appropriations Committee by April 10.

The state education department did not reply to a request for comment about the potential loss of funding.

The potential loss of both the state and federal funds would hurt Indiana schools’ ability to educate students, said Terry Spradlin, executive director of the Indiana School Boards Association, in testimony before lawmakers in March in support of the state grant.

“The state grant is quite important to help offset costs, provide matching funds, and support access to necessary bandwidth for effective classroom learning,” Spradlin told Chalkbeat via email. “Schools are utilizing the Internet more than ever, and they are leveraging the additional bandwidth to better support their teachers and students.”

Rural schools in particular have relied on the state and federal funds to improve slow and unreliable internet connections by laying fiber, Spradlin said. But all schools are experiencing more demand for faster internet to keep up with classroom technology use, which in turn means higher costs.

One of the state’s large suburban districts, Carmel schools, which received around $540,000 in federal funds and $93,000 in matching state dollars in 2024, said in a statement that these funds support “internet access, essential cybersecurity measures like our firewall, and maintaining both wireless and wired networks.”

“Losing this funding would present a significant challenge, as it currently covers 40% of these critical costs,” the Carmel district said. “Beyond our district, these changes threaten equitable access to high-quality internet and network infrastructure for millions of students across the U.S., widening the digital divide and impacting learning opportunities,”

The Supreme Court is expected to decide in FCC v. Consumers’ Research this summer.

Chalkbeat is a nonprofit news site covering educational change in public schools.

Aleksandra Appleton covers Indiana education policy and writes about K-12 schools across the state. Contact her at aappleton@chalkbeat.org.