The FCC will now seek comments on the proposal, which would overhaul the agency's E-Rate program.
E-Rate was established in 1997 to connect schools and libraries to the Internet. But the connection speeds still lag behind what many people have in their homes, and many students are unable to take advantage of online tools like streaming videos.
E-Rate, which costs about $2 billion per year, is funded through fees on monthly phone bills
The FCC's proposal would prioritize funding for high-capacity fiber networks and Wi-Fi routers, while scrapping support for dated technologies like paging and directory assistance.
The FCC is also seeking comment on ways to limit the cost of the program and increase transparency. The agency's proposal would streamline the application process and simplify the filing system.
Sen. Jay Rockefeller (D-W.Va.), the Commerce Committee chairman and a longtime champion of E-Rate, commended the FCC for proposing to expand the program.
"The global economy demands an increasingly educated workforce with higher skills and strong backgrounds in science, math and technology," he said. "Our students must have access to high-speed Internet connectivity to gain the skills necessary to compete."