Transforming the Financing of Early Care and Education

Reflections from the Research & Policy Team

Last week, the National Academies of Sciences, Engineering, and Medicine (NASEM) released their highly anticipated report Transforming the Financing of Early Care and Education. The report explores how to finance quality early care and education (ECE) systems so that it is accessible to all families in all settings.

Here’s what we think you should know about the new report from NASEM:

  • A high quality ECE system will cost a lot…but it’s worth it. The committee estimates full financing of high-quality early childhood education would cost $140 billion (or, 0.75 percent of the gross domestic product (GDP)). This sounds like a lot, but is still less than what other economically developed countries like us spend on ECE – on average, 0.8 percent of GDP.
  • “Fragmented.” Financing for service delivery, system supports, and workforce supports are in silos. There is not a systematic way to promote quality, assist families in affording quality, or support professional development that is critical to quality.
  • Money should follow quality. Quality standards must be defined and states shouldn’t get financing dollars until they can demonstrate that they are prepared to roll out their system of ECE. Financing mechanisms have to work together to define quality and then link the dollars to quality. This means standards of quality and associated funding mechanisms are clear for both the settings and the educators responsible for providing quality care.
  • Access to quality for all is critical. Access to quality ECE should not be contingent on the work status or income of parents, but when parents can pay there should be standardized progressive payments based on income.
  • Everyone is responsible for financing quality ECE. As our Parents and the High Cost of Child Care reports highlight, parents bear most of the brunt of the cost of care. This is unsustainable and has to change for full accessibility to quality ECE to become a reality. Financing quality ECE must include a combination of federal, state, and private mechanisms.
  • A highly qualified workforce = high quality ECE. The ECE workforce is under-paid, under-respected and under-trained. Educators should not have to finance their entire education, and financial assistance is critical for practitioners to increase their knowledge base, competencies, and qualifications. State and federal governments should provide financing for ECE curricula, postsecondary institutions, and faculty.
  • Data, data, data. Sustained funding for research and evaluation on financing ECE is critical to understanding what works in which situations and for whom. In addition, collection of data over time allows for a better understanding of the changes in the ECE landscape when financing is available.

It’s clear from this report that the specific financing for this system will be challenging, but we know that the benefits outweigh the costs. Stay tuned as CCAOA continues to delve deeper into this report. Join us in thought partnership as we develop new products and consider how our work aligns with this groundbreaking report as it relates to licensing, supply and demand and policy changes.


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Child Care Aware of America