There were a huge $1.1 million worth of applications from schools in Indi for a government fund that could give just $200,000 to each electorate.
The local schools community fund provided money to schools for small-scale projects valued between $1000 and $20,000.
Speaking at a public event this week, Indi MP Helen Haines said while some metropolitan areas did not use up their grants, the applications showed a huge demand in rural areas.
"Demand for community grants absolutely exceeds the available resources," she said.
She met last week with Education Minister Dan Tehan, who she described as "a great champion for rural and regional education", and said he was surprised by the demand in Indi.
"I said 'Dan, $200,000 is just not cutting the mustard. I've had applications from schools that need new toilet blocks for goodness sake, they need air conditioning. What can we do about this?'," Dr Haines said.
"I've since met with Minister Tehan, where I spoke with him about the high level of interest from our school communities in the local schools community fund and that it's over-subscribed."
She said he was sympathetic to the idea of a second round of funding and possibly one just targeted at rural and regional schools.
Sixteen of the 71 applications were successful including $1146 for "books in homes" for Wodonga's Blackburn English Language School and $20,000 each for facility refurbishments at Yea, Wangaratta, Eskdale and Kiewa Valley campuses and for a school bus at Mitta Mitta.
The Borinya Wangaratta Community Partnership received $17,256 for a masterplan and small-scale renovation.