We Can Meet the Need for High-Quality, Affordable Early Care and Education

Imagine if every family in the nation had the option to send their child to a high-quality, affordable early care and education program. A much-anticipated report outlines a plan that would make that happen. The National Academies of Science, Engineering and Medicine’s Committee on Financing Early Care and Education with a Highly-Qualified Workforce says the investment needed is:

  • Less than 25 percent of what the US spends on K-12 education.
  • A smaller percentage of US Gross Domestic Product (GDP) than the average percentage spent by Organization for Economic Co-operation and Development (OECD)
  • About the same amount as the US currently spends on research and development, another critical investment in our nation’s future.

The Committee also made recommendations for how to move to a well-financed, coordinated early care and education system, with affordable access to high quality care and education for all children and families.

In order to estimate the costs of providing high quality early childhood education, the Committee considered:

  • Onsite Costs, including:
    • Staffing levels (administrators, teachers, and assistant teachers).
    • Staff qualifications and compensation.
    • Onsite roles and professional development, including continuing education and planning time.
    • Operating hours and days.
    • Facilities and other non-personnel costs.
  • System-level Costs, including:
    • Workforce development costs, meaning what would it take to develop a strong pipeline of early childhood educators.
    • Costs for evaluating and regulating the quality of care.

To ensure that they were adequately estimating the cost of truly high quality early childhood education, the Committee determined funding based on:

  • Lead educators having a four-year degree.
  • Resources for professional development like coaching and mentoring.
  • Paid time for educators to access professional development.
  • Specialists for children with special needs.
  • Paid time for planning, preparation and professional development.

The Committee also assumed that as the quality of early childhood education improves, more families will choose to access it. Based on research, they estimated that hours for early care and education usage would increase by:

  • 20 to 25 percent for low-income families
  • 15 percent for middle-income families
  • 10 percent for affluent families

Their cost calculations are based on that estimated increased usage.

So What Would It Cost?

The Committee proposes a phased-in plan, with the final cost totaling $140 billion. Since that number is a hard one to wrap our heads around, here’s what it compares to:

  • Less than one percent (0.75 percent) of current U.S. GDP. OECD countries spend an average of 0.8 percent of GDP on ECE already.
  • Twenty-two percent of current K-12 spending. There are about 33 percent as many children birth-to-five as in K-12.

That would be the full cost, but families could be responsible for a portion of that. The Committee proposes that families cover 42 percent of the costs. Currently, families cover about 55 percent of the costs. Families with higher incomes would pay a larger share of their children’s costs than families with lower incomes, and the poorest families would pay nothing.

Taking the family contribution into consideration, the total public and private investment would be about $82 billion. The US currently spends $29 billion on early care and education, so the total required increase in spending would be about $53 billion.

Cost Estimate
Total Cost$140 billion
Family Portion/($58 billion)
Current US Investment($29 billion)
New Public/Private Investment Required$53 billion


Current Systemic Obstacles to Meeting the ECE Need

The Committee found that currently there are systemic obstacles to meeting the need for high quality, affordable early care and education, including:

  • Compensation for early care and education professionals is low.
  • Financial supports for ongoing professional learning and higher education are generally provided only on a limited basis.
  • There is a large burden to pay for early care and education directly on families in the form of fees and tuition.
  • Even for those families who qualify for subsidized programs, many are not receiving assistance due to inadequate funding.
  • A lack of coordination among financing mechanisms leads to gaps in early care and education affordability for low-income families and under-utilization by middle-income families.
  • Typically, providers’ receipt of funding is not directly linked to attaining or maintaining quality standards.
  • Levels of support to providers and to families are rarely based upon the costs of offering high-quality early care and education services and therefore don’t drive quality improvements.
  • Financing supports for system-wide quality improvement are limited and often not sustained.

Committee Recommendations

The report concluded with 10 recommendations for building an effective, financed early care and education system in the US, including:

An Effective Financing Structure:

Recommendation 1: Federal and state governments should establish consistent standards for high quality across all early care and education programs. Receipt of funding should be linked to these quality standards. Payments to providers should be sufficient to cover the total cost of high-quality early care and education.

Recommendation 2: All children should have access to affordable, high-quality early care and education, that is not contingent on the characteristics of their parents.

2a. Eligibility for early care and education subsidies (with the exception of employer-based programs) should not require parental employment, job training, education, or other activities.

2b. Federal and state governments should set standard family co-pays that increase as families’ incomes increase.

2c. The share of total early care and education system costs that are not covered by families should be covered by a combination of public support to providers who meet quality standards and assistance directly to families.

Recommendation 3: In states that are ready to do so, state governments or other state-level entities should act as coordinators for the various federal and state funding streams that support early care and education.

Sharing the Cost for High Quality ECE

Recommendation 4: Federal and state governments should increase funding levels to ensure adequate funding.

Recommendation 5: Payments for families at the lowest income level should be reduced to zero, and if a family contribution is required by a program, that contribution, as a share of family income, should progressively increase as income rises.

Planning for the Transition to High Quality

Recommendation 6: A coalition of public and private funders should support the development and implementation of a first round of local-, state-, and national-level strategic business plans to guide transitions toward a reformed financing structure for high-quality early care and education.

Financing Workforce Transformation

Recommendation 7: The early care and education workforce should be provided with financial assistance to increase their knowledge and competencies and to achieve required qualifications through higher-education programs, credentialing programs, and other forms of professional learning. The current early care and education workforce should bear no cost for this training, and the entering workforce should be assisted to limit costs, with a goal of maintaining and further promoting diversity in the pipeline of early care and education professionals.

7a. Existing grant-based resources should be leveraged, and states and localities, along with colleges and universities, should work together to provide additional resources and supports to the current workforce as practitioners further their qualifications.

7b. States and the federal government should provide financial and other appropriate supports to limit any tuition and fee expenses that are incurred by future early care and education professionals.

Recommendation 8: States and the federal government should provide grants to colleges and universities to develop faculty and early care and education programs and to align the curricula with the science of child development and early learning and with principles of high-quality professional practice. Federal funding should be leveraged through grants that provide incentives to states, colleges, and universities to ensure that higher-education programs are of high quality and aligned with workforce needs.

Assessing Progress Toward Quality

Recommendation 9: The federal and state governments, as well as other funders, should provide sustained funding for research and evaluation on early childhood education, to ensure efforts to improve the system are resulting in positive outcomes for children and in the recruitment and retention of a highly qualified and diverse workforce.

Recommendation 10: The federal government should align its data collection requirements across all federal early care and education funding streams to collect comprehensive information about the entire sector.

Committee Funders

The Committee’s work was sponsored by a long list of national funders, including, among others, the US Administration for Children and Families, the U.S. Department of Education, the Alliance for Early Success, the Buffett Early Childhood Fund, the Bill and Melinda Gates Foundation, the Kresge Foundation, the W. K. Kellogg Foundation and the National Academies’ of Sciences, Engineering, and Medicine.

Click here to access report highlights.

Click here for slides.

Click here to download the full report.