Why Is Preschool so Expensive?

If you think it’s because the teachers are getting rich, you’re sorely mistaken.


Question: Would you pay more to send your kid to preschool or to college? Don’t laugh! Preschool — the land of finger painting, naptime and jelly sandwiches with the crust cut off — really can be more expensive than college. Nationally, it runs from $6,000 to $19,000 per year, which, just, wow. As a parent, you’ll often find yourself angrily wondering why it costs so much to have kids color pictures, play on a playground and make sure someone stops them from licking the paintbrushes or whatever. That’s why we went through the numbers alongside the University of California, Berkeley’s Center for the Study of Child Care Employment [CSCCE], and it ended up painting a pretty grim picture.

Seriously, it’s preschool — not astrophysics. What could be so expensive about it?
Perhaps it’s unfair to compare early education to the cost of, say, a babysitter, or to education in general. There’s a perception issue here: We all assume that college is expensive, of course, but we tend to underestimate (maybe even take for granted) the real cost of education. That’s largely because much of “free” public education is paid for by taxes, which simply means we don’t get a bill in the mail for it.

Public schools and colleges have economies of scale that many small preschools don’t. Plus, public colleges have public funding (everyone pretty much accepts that private universities are astronomically priced, because they have to pay for a lot themselves — it doesn’t all go to their insanely large endowments).

How do the costs break down?
Here’s an example preschool, according to the CSCCE. Say 40 kids attend full-time; let’s say the annual tuition is the national average of $10,000, meaning the school’s annual revenue is $400,000. Twelve percent ($48,000) goes to overhead like rent, utilities and maintenance; 23 percent ($92,000) goes to classroom materials, food and administrative costs; this leaves $260,000 for personnel — so far, so good.

So how is it that watching 40 kids costs $260,000? The thing is, preschool demands low student-to-teacher ratios, so those economies of scale that work in other levels of education don’t apply — i.e., you can’t get away with one teacher for 25 kids. Different states have different requirements for student-to-teacher ratios, but it’s always far lower than in elementary school. According to the CSCCE, those 40 kids at the example preschool will be in three classrooms, which demands three lead teachers, six assistant teachers and one director. That’s 10 employees right there, and they’re all in the classroom — it doesn’t count admin, maintenance, etc.

So teachers don’t make that much, do they?
Nooooooooo. That’s the rub: Median wages for preschool workers are $13.94 an hour (for kindergarten teachers, it’s $31.29). And unlike those kindergarten teachers, preschool workers don’t usually get insurance, paid sick or vacation days or time for professional development. It’s a grind — one that involves changing diapers, negotiating a lot of tears and dealing with a whole lot of kid energy. Preschool teachers work very hard for very little, despite how expensive it is for parents to send their child to them. The combination of low pay and high stress leads to high teacher turnover for preschools.

What else is going on to make it so expensive?
The other reasons have to do with the ways preschool is unique. Let’s start with the fact that loans and grants and scholarships aren’t really a thing for preschool — the very things that help defray the cost of college for most people. There is the federal child and dependent care tax credit, which is capped at $3,000 for one child and $6,000 for two children. But it’s not refundable, which means it doesn’t help low-income families that don’t earn enough to pay taxes.

And there are no college funds — or rather, preschool funds — either, right?
That’s right. Parents have at least 18 years to save for their kid’s college! Everyone knows it’s expensive, and there’s somewhat of a societal expectation to save for it. But there’s obviously less time to save for preschool, unless you started well before you had kids. But how many people do you know that started a preschool savings plan?

Most people can’t even save money at that point.
Exactly. For many parents, preschool often comes during their lowest earning years. And that tuition bill is on top of all the baby gadgets and other stuff that new parents have spent too much money on.

And what’s up with being charged to apply to be on the waitlist?
Just another administrative fee!

Go on then, how much is it going to cost me?
Here’s a clickable map by state that shows the average annual cost of childcare. Uh, brace yourself.

What’s the solution, then?
The obvious one is public money. There’s Head Start, and states have various programs (California, for example, has a state preschool program as well as migrant development programs) but much of the public funding that goes toward early childhood education is available strictly for the poor. There are various bills and policies introduced that would allow for federal funding to bring down the costs of childcare for middle-class earners if they were to become law, but we’re not yet to a point of robust government funding for it. For now then, parents are stuck with the entire bill.

So the reality is that preschool funding relies mostly on parent tuition?
Yep. Get used to it: This article about the preschool scene in Seattle paints a scary picture of getting on waiting lists before birth; bribing preschool administrators with gifts just to get in or pathetically begging over the phone; and preschool teachers working second jobs, or simply leaving for more lucrative pay as a nanny.

The big-picture view is just plain dysfunctional: Parents pay thousands every month to have their young, impressionable, vulnerable child taught and cared for by a skilled yet overworked professional who earns little more than minimum wage and no benefits whatsoever.

The lesson? Education of any kind is expensive — including the kind that involves making sure little kids keep crayons out of their pants.