What Does Biden’s Public Pre-K Mean for Child Care Providers?

Next week, the House is expected to vote on the Build Back Better Act, which includes investments in child care, paid leave, and families broadly. One of the most talked about parts of this plan is publicly funded preschool for all three and four year olds in the country, sometimes known as Universal Pre-K. One question we hear a lot at Winnie is what does this mean for our existing child care and preschool providers? Will private preschool programs suddenly lose all their three and four year old children because those children will just go to their local public Pre-K program that is free?

Private preschool programs could be used as public Pre-K

Private programs can rest assured that they will remain an essential part of the ecosystem. The plan encourages a mixed-delivery public Pre-K system that would include utilizing private providers, faith-based care, Head Start, and public school districts. Given this, it’s likely that most for-profit child care centers will be eligible for participation in these public Pre-K programs.

It’s also unlikely that public schools will offer full-time Pre-K and more likely their day will end at a similar time as Kindergarten or even earlier. This means that working parents of children ages three and four may opt to use a private center, faith-based, or home-based child care program with longer hours to match their own work day.

Private programs can rest assured that they will remain an essential part of the ecosystem.

How does the money flow to child care providers?

According to The New York Times, “States would come up with a formula for how much child care should cost... Then, parents would pay their share, similar to a co-pay at a doctor’s office, and the rest of the money would be sent to the providers, financed mostly by the federal government and partly by the states. If parents chose to send their children to more expensive preschools, they would pay the difference.”

Importantly, programs participating in this public Pre-K system will be required to pay their teachers a living wage. Although it is unclear what that living wage is and the final determination will be left up to the states, we do know that there is a shortage of child care workers and the key to fixing that is more competitive pay for this extraordinarily valuable work.

The upshot is that private programs that are part of the public Pre-K system would likely collect some money from parents and the rest from the government, for all three and four year olds in their program.

The states ultimately decide

But, there is still some risk that the availability of public preschool could negatively impact private preschool programs depending on how states implement the new laws.

According to the KinderCare S-1 filing, “The initial legislative drafts of the President’s proposal for a new federally funded preschool program allow private, for-profit entities to be eligible for participation, but do not mandate such participation. It is unclear how the proposed legislation will progress in the current political and fiscal climate, or how the states would implement the programs.”

In other words, the eligibility of private preschool programs to participate in the public Pre-K system is not guaranteed by this bill. States may allocate more of the funding for public Pre-K to public school districts. If that happens, it will take a lot of three and four year olds out of the market for private programs. It may also mean the standard of care is different than what parents are used to at private centers as typically public school districts have higher children to teacher ratios and are regulated differently.

What about home-based providers?

According to this report by the National Institute for Early Education Research and Home Grown, there are both opportunities and challenges in including home-based providers, also known as family child care providers, in the public Pre-K system. On one hand, home-based providers can provide much needed, quality supply to an already strained system. For their businesses too, three and four year olds provide an important source of revenue. 

At the same time, it may be challenging for home-based providers to meet the same standards as larger private centers and public school districts that have more space, teachers, and resources. Depending on what is required of programs to access this new source of funding, it may or may not be realistic for home-based providers to participate.

What’s next?

Overall, more money going into the child care industry from the federal government is a good thing. It’s important that we make these investments now as many child care businesses were hit hard by the pandemic and at-risk of closing. Without affordable high quality child care, parents cannot remain in the workforce, as we saw during the pandemic. Universal preschool is a game-changer for working families. 

As we advocate for this money from the federal government, it’s equally important to advocate for mixed-delivery systems that benefit the wide range of providers in the ecosystem. The more thriving, high-quality child care providers there are in the ecosystem, the more families and children will benefit.