I thought this too, but after receiving my first bill (prorated, one month plus 7 days) the discount applied to the total bill. My total bill for the first month plus 7 days (which they calculate by using 7/30(average days in a month) and multiplying by your rate plan) was $100.69 after taxes and fees.
$89.99 (450 Minutes w/ Unlimited Data, plus $20 for Unlimited Text) * .85 = $76.49
Pro-rated 7 days = 7/30 (.23) * $76.49 = $17.85
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Total before taxes and fees = $94.34
Add about $6 taxes and fees (normally would be about $4.50 for one month)
And you get a total of $100.69
Which means the 15% FAN discount was applied to my total bill, not just the rate plan.

BTW, my FAN is for Georgia State Gov't (Education).