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A headline on the SLD Web site reminds libraries that a new method to calculate discount rates must be used this year. Rates calculated under the old method will be revised - upward or downward - by the SLD to reflect the new method.
In previous years, a library was required to use the aggregate discount rate of the school district in which the library was located. A school district's aggregate discount rate is based on a weighted average of the rates for each of the district's component schools.
Beginning this year, a library must calculate its own discount rate. The calculation uses student data from the associated school district, but does not necessarily match the district's own aggregate rate. The library's calculated discount may be slightly lower, equal to, or slightly higher than the district's aggregate discount rate. As indicated in the Form 471 instructions (pp. 16-17), a library must:
(1) Determine the overall percentage of students that are eligible for free or reduced priced lunches based on the total number of students in the associated school district (see below).
(2) Determine whether the school district and library are in an urban or rural area. A list of the rural areas can be found in the SLD Web site Reference Area.
(3) Find the library's discount rate in the Discount Matrix, also found in the SLD's Reference Area.
The best way for a library to determine the eligible student percentage is to contact the local school district and ask for student eligibility data and supporting documentation. Note that it is important to ask the district for a count of total students and total eligible students, not for the school district's aggregate discount rate.
If information is not available from the district, school lunch program data can often be obtained from a state Web site (a list of state E-rate sites is available on the E-Rate Central Web site in the "States' Sites" area).
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