Cost of Providing Quality Preschool Education to America's 3- and 4-Year Olds

The National Institute for Early Education Research (NIEER) estimates the cost of providing a quality preschool education to every 3- and 4-year old in the nation would be just under $70 billion dollars a year, based on an annual cost- per-child of around $8700. This would cover the full costs of the programs; including facilities, administration, and support services. It also would ensure that the child care needs of working families are met so that every child could participate.

Policy makers may choose to phase in preschool-for-all by starting with full funding for children in poverty, or to include only 4-year-olds. Therefore, cost estimates are presented by income and age, as well as for all children.

Costs of Providing Quality Preschool Education

NIEER derived these numbers by using the following data:

• Numbers of children: The U.S. Census Bureau reports there were 3.89 million 3-year olds and 3.99 million 4-year olds in 2000. The Census Bureau predicts that number will fluctuate little over the next decade.

• Poverty Rate: The National Center for Children in Poverty Child Poverty Fact Sheet (March 2002) reports 17 percent of children under 6 are in poverty.

• Cost of academic-year program: The National Center for Education Statistics projects the total cost of a year of K-12 public school to be $8800 for 2002, with an average pupil- teacher ratio of 16:1. Quality preschool programs need an assistant teacher in each class. This second person could increase costs (assistant teacher salaries average $15,000 plus 25% in benefits), however, public school costs already include aides and other support costs, as well as costs that may not apply to preschoolers. Therefore, NIEER assumes the average cost of preschool during the academic year would be the same as the K-12 cost-per-child, approximately $8800.

• Cost of wrap-around service: A typical school year of 180 days and 6 hours equals 1080 hours. But full time child care throughout the year requires roughly 2450 hours, an additional 1370 hours. NIEER assumes this can be done for $3 per hour per child, which adds $4110 per child. Adding this to the $8,800 cost of academic-year program yields $12,910 for full day year-round preschool.

• Hours spent in preschool: Survey data from the 1999 National Household Education Surveys Program show only one-third of 4 -year olds receive more than 35 hours of child care per week. If preschool becomes universally available, participation rates could change, but a simple estimate based on current rates is: 1/3 taking a half-day program only during the school year, 1/3 in a full day program during the school year, and 1/3 in a full-day program year round. This yields the following estimate for average cost across all children:

.33 x $4,400 + .33 x $8,800 + .33 x 12,910 = $8,703 per child 

• Total annual cost: Multiplying the cost-per-child figure by the number of 3- and 4-year olds in the 2000 Census yields $68.5 billion. This assumes that parents pay no fees even for before- and after-school child care and does not allow for a lower percentage of 3-year olds in full day programs.

• Participation rates: NIEER assumes 100% of 3- and 4-year olds will participate in some fashion. If actual participation rates are less, costs will be lower. Currently, about 70 percent of 4-year-olds in the country attend center-based programs. Less than half of 3-year-olds attend centers. If participation rates were 70 to 90% for 3- and 4-year olds, costs would be 10 to 30 percent lower.

• Cost to Government: The estimate assumes that all costs are borne by the public. However, costs could be shared across federal, state and local governments so that no one level of government pays all of the costs. For example, a 50-50 split between federal and state governments would require each to pay just over $34 million per year. Also, some parents might be required to pay part of the costs (fees for before- and after-school programs are common), which would reduce costs to government.