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WebMemo #2643 on Education

October 6, 2009

The Early Learning Challenge Fund: Increased Federal Role in EarlyEducation

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In September, the U.S. House of Representative passed H.R. 3221, the "Student Aid and Fiscal Responsibility Act of 2009" (SAFRA). It includes an $8 billion Early Learning Challenge Fund (ELCF), which provides grants to states to reform and increase their early education and care programs. If enacted, SAFRA would significantly increase the federal government's role in preschool education.

The ELCF is problematic on two fronts: (1) It grows the federal role in education, and (2) it represents a considerable increase in spending on early childhood education while creating an unnecessary subsidy for early education and care.

Increased Federal Role in Early Childhood Education

The Pathway Grants created in the ELCF provide funding to states on a competitive basis to increase the quality of preschool programs and the number of disadvantaged children in those programs. These grants encourage growth in government preschool programs by giving priority to states that "dedicate a significant increase, in comparison to recent fiscal years" of their expenditures on early learning programs.[1]

In order to be eligible for Pathway Grants, states must establish early learning and development standards that are aligned with K-3 academic content standards.[2] States must also establish program rating systems that demonstrate, for example, program quality, staff qualifications, and professional development. States are required to delineate how they will encourage all early education programs, including family providers, to participate in the rating system.

States must also demonstrate how they will increase the number of certified early education teachers while implementing the level of salary commensurate with such credentialing. However, the bill explicitly prohibits the use of Pathway Grants for merit pay.

Furthermore, the ELCF requires the Secretary of Education to provide an annual report to Congress on state efforts to increase "high-quality" preschool programs.[3] States must report to the Secretary annually the number of disadvantaged children enrolled, the number of providers taking part in the state rating system, and the early childhood education credentials of providers receiving funds.

Although states are required to match federal funds appropriated through the ELCF, the bill includes a financial hardship waiver that allows the Secretary to waive the match if a state demonstrates financial difficulties. According to the National Association of State Budget Officers, at least 35 states face budget deficits in 2010.[4] It is likely that a majority of states could seek a waiver of the federal match requirement.

The increased role for the federal government in early childhood education created through SAFRA could limit choices for families. While SAFRA does allow for public-private partnerships, private providers may be hesitant to participate in the ELCF because of the additional regulatory burdens that would be placed on them. This leaves private providers in the difficult position of either incorporating the new federal regulations in order to receive funding or competing with growing state-subsidized programs, which could eventually lead to a "crowding out" of the private provision of care. The result of this increased federal role could be a reduction in the number of private providers, ultimately limiting choices for families.

Increased Federal Spending and Unnecessary Early Education Subsidies

SAFRA authorizes $1 billion annually from 2010 through 2019 for the ELCF. However, federal spending is already at an all-time high for such programs. State spending on public preschool programs reached $4.6 billion in 2008, a considerable increase over the $3.7 billion spent in 2007. When all sources of funding are included, spending on state preschool programs reached $5.2 billion in 2008--a 23 percent increase over 2007 spending.[5]

According to the Government Accountability Office, there were 69 programs administered by 10 federal agencies supporting education or childcare for children under the age of five in 2005.[6] A conservative estimate of federal spending on early education and care programs exceeds $25 billion in 2009.[7]

Proponents argue that families will not have access to early childhood education without more government subsidies. However, the evidence shows otherwise. More than 80 percent of four-year-old children are already enrolled in some form of preschool program, many of which are served by private providers.[8] In fact, enrollment of three- and four-year-old children in school has increased from around 9 percent in 1964 to over 55 percent by 2007--an increase of more than 180 percent.[9] For families that cannot afford private preschool or who live in states without public programs, the federal Head Start program operates in every state to serve low-income families.

Creation of the ELCF in the SAFRA is based on the assumption that taxpayers should pay to enhance state preschool programs and expand enrollment in subsidized early education and care. However, there is little demand for an increase in state preschool programs. Pouring billions of additional federal dollars into state preschool programs when spending on early education and care is at an all-time high will increase costs for taxpayers and produce minimal benefits for families.

A Better Approach

President Obama has pledged to pump "billions of dollars into early childhood education."[10] The $8 billion preschool provision in the SAFRA puts the President well on his way to making good on that promise. However, it is not clear that driving more taxpayer dollars into federally- directed early education programs will provide a substantial new benefit to taxpayers.

Instead of creating new costly federal programs, Congress should reform existing programs to provide better services to students and savings to taxpayers.

Lindsey M. Burke is a Research Assistant in the Domestic Policy Studies Department at The Heritage Foundation.

Show references in this report

[1]Student Aid and Fiscal Responsibility Act of 2009, H.R. 3221.

[2] Ibid.

[3] Ibid.

[4]National Governor's Association, National Association of State Budget Officers, "The Fiscal Survey of States," June 2009, at /static/reportimages/1586B51AEA1E670A13D20D1DC4227B41.pdf (September 25, 2009).

[5]W. Steven Barnett et al., The State of Preschool 2008 (New Brunswick, NJ: National Institute for Early Education Research, 2008), at http://nieer.org/ yearbook/pdf/yearbook.pdf (September 21, 2009).

[6]Government Accountability Office, Update on Prekindergarten Care and Education Programs, GAO-05-678R, June 2, 2005, at http://www.gao.gov/ new.items/d05678r.pdf (September 25, 2009).

[7]Dan Lips, "Reforming and Improving Federal Child Care and Preschool Programs Without Increasing the Deficit," Heritage Foundation Backgrounder No. 2297, July 13, 2009, at http://www.heritage.org/Research/ Education/bg2297.cfm.

[8]Barnett et al., The State of Preschool 2008.

[9]U.S. Department of Commerce, U.S. Census Bureau, "Current Population Survey, 1947-2007," Table A-2, at http://www.census.gov/population/ socdemo/school/TableA-2.xls (May 18, 2009).

[10]Shikha Dalmia and Lisa Snell, "Protect Our Kids from Preschool," The Wall Street Journal, August 22, 2008, at http://online.wsj.com/public/ article_print/SB121936615766562189.html (September 21, 2009).

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