The Digital Equity Act is a 2021 federal law that authorized roughly $2.75 billion through three grant programs to help underserved communities get online, build digital skills, and afford home broadband. All three programs were cancelled by the Trump administration effective May 9, 2025, and a lawsuit challenging that cancellation is still pending in federal court. The statute itself remains on the books at 47 U.S.C. §§ 1721–1724, so the framework could be reactivated if a court orders reinstatement or if Congress acts.
The Three Grant Programs
Congress passed the Digital Equity Act as part of the Infrastructure Investment and Jobs Act, signed in November 2021. The National Telecommunications and Information Administration, an agency inside the Department of Commerce, was given responsibility for running the three programs it created. Each one targeted a different stage of the work.
State Digital Equity Planning Grants
Section 1723(c)(3) set aside $60 million for states to build comprehensive digital equity plans. This was the research phase: surveying residents, mapping connectivity gaps, identifying which groups lacked broadband access or the skills to use it, and setting strategies to close those gaps. A state needed an approved plan before it could receive the larger implementation funding.
State Digital Equity Capacity Grants
Section 1723 authorized formula-based grants to put those plans into action. Congress appropriated $240 million for fiscal year 2022 and $300 million for each of fiscal years 2023 through 2026. The formula splits funding three ways: 50 percent based on a state’s share of the national population, 25 percent based on the proportion of covered populations in the state, and 25 percent based on how far the state trails the national picture on broadband availability and adoption. 1Office of the Law Revision Counsel. 47 USC 1723 – State Digital Equity Capacity Grant Program Eligible activities included expanding public computing centers, subsidizing internet costs for low-income households, and running digital literacy programs.
Digital Equity Competitive Grants
Section 1724 created a separate $1.25 billion competitive grant program with a broader pool of eligible applicants: political subdivisions, tribal governments, nonprofits other than schools, community anchor institutions such as libraries, local educational agencies, workforce development organizations, and partnerships among those entities. This program was aimed at targeted projects that might not fit inside a state’s broader plan but could deliver high impact for specific communities. 2Office of the Law Revision Counsel. 47 USC 1724 – Digital Equity Competitive Grant Program
Cancellation and the Pending Lawsuit
On May 8, 2025, President Trump announced the cancellation of all Digital Equity Act programs. The Department of Commerce sent formal termination letters to states and competitive grant recipients the following day. Those letters stated that project costs incurred after May 9, 2025 would not be reimbursed. Planning grants, capacity grants, and competitive grants were all shut down.
The National Digital Inclusion Alliance filed suit in the U.S. District Court for the District of Columbia in October 2025, arguing that the executive branch lacked authority to cancel funding Congress directed it to spend. The administration asked the U.S. Court of Appeals for the D.C. Circuit to dismiss the case, contending that the programs contained unconstitutional race-based requirements. As of early 2026, the litigation is unresolved.
If a court orders reinstatement, the programs could resume under the existing statute. If the administration prevails, the roughly $2.75 billion in authorized funding will stay unspent unless Congress acts separately. Some states and localities have launched their own broadband adoption programs using state funds, and several private foundations have expanded digital inclusion grantmaking to cover part of the gap.
Who the Law Was Built to Serve
The statute at 47 U.S.C. § 1721 defines eight “covered populations” that the grant programs were required to reach. 3Office of the Law Revision Counsel. 47 USC Chapter 16, Subchapter II – Digital Equity Act of 2021
- Low-income households earning no more than 150 percent of the federal poverty level.
- Aging individuals.
- Incarcerated individuals in state or local facilities. The statute specifically excludes people held in federal correctional facilities.
- Veterans.
- People with disabilities.
- People with a language barrier, including English learners and individuals with low literacy levels.
- Racial and ethnic minorities.
- Rural residents.
Applicants were expected to show how a proposed project would reach one or more of these groups. Broad promises about closing the digital divide, without a connection to a defined population, weakened an application considerably.
Obligations for Grantees Who Already Spent Money
Organizations that received and spent Digital Equity Act funds before the May 2025 cutoff still carry reporting obligations under 2 C.F.R. Part 200. Those include Federal Financial Reports (SF-425) and programmatic progress reports for each reporting cycle. The closeout window runs 120 calendar days after the period of performance ends. Within that window, recipients have to submit final financial and programmatic reports, return any unspent funds, and account for all property acquired with grant money.
Subrecipients work on a tighter clock: 90 days after the period of performance ends, they must submit required reports to the pass-through entity. Failing to close out properly can affect an organization’s ability to receive future federal funding, so these deadlines matter even though the broader program has been shut down.
If the Programs Restart
No new applications are being accepted while the programs remain cancelled. If a court order or new congressional action reopens them, the statutory framework already in place will apply.
Every applicant needs a Unique Entity Identifier from SAM.gov. Registration is free and satisfies the broader federal requirement that any entity applying for federal financial assistance keep an active SAM.gov account. 4SAM.gov. Get Started with Registration and the Unique Entity ID 5eCFR. 2 CFR Part 25 – Unique Entity Identifier and System for Award Management The core application form is Standard Form 424, the cover sheet for federal assistance applications. 6United States Department of Agriculture. Instructions for the SF-424 Non-construction projects add the SF-424A budget form; construction projects add the SF-424C. 7Grants.gov. SF-424 Family A strong application also includes a detailed budget narrative, a project description tied to covered populations, a timeline with measurable milestones, letters of commitment from partners, and an explanation of how the project fits the state digital equity plan.
The competitive grant program required a minimum 10 percent non-federal match, with a waiver available for territories. The capacity grant program did not carry a matching requirement because it distributed formula-based funds.
Two statutory caps apply to competitive grant spending: no more than 10 percent of grant funds can go to administrative costs, and no more than 10 percent to evaluating the project’s effectiveness. 2Office of the Law Revision Counsel. 47 USC 1724 – Digital Equity Competitive Grant Program At least 80 percent of every competitive grant dollar has to go to the actual work: training, equipment, broadband subsidies, or public computing facilities.
The capacity grant authorization runs through fiscal year 2026. Organizations that invested in digital equity plans and partnerships before the cancellation may find those assets useful if the programs restart, or if new federal digital inclusion funding emerges under a different name.