California Preschools Struggle as Free Universal Kindergarten Expands

Small businesses fold under pressure, leaving childcare gaps

Inglewood’s Milestones Preschool, a cherished home-based learning center, has closed its doors after nearly two decades. Director Milena Bice cited the unbeatable competition from free transitional kindergarten (TK) and a struggling economy as primary reasons for her difficult decision.

“I Can’t Compete With Free”

For years, Milena Bice poured her heart into Milestones Preschool, transforming her home into a vibrant learning environment for young children, including those with neurological differences. However, the financial realities of running a small childcare business proved too challenging. Thin profit margins meant Bice often waived tuition for families unable to pay full cost, a sacrifice that ultimately became unsustainable.

“I can’t compete with free,” Bice told LAist. “And in this economy, I think a lot of families are hurting.”

This sentiment echoes a statewide trend. As California phases in universal transitional kindergarten, making free public education available to all 4-year-olds, private preschools and childcare providers are experiencing declining enrollment, threatening their very existence.

Unmet Need Persists Despite TK Expansion

Despite the growth of TK, the demand for childcare, especially for infants and toddlers, remains critically high. A recent report indicates that only 19% of eligible children receive state-subsidized care, with the youngest age groups facing the greatest scarcity and highest costs (California Budget & Policy Center, 2024). In fact, according to the U.S. Department of Health and Human Services, the average annual cost of center-based infant care in California exceeds $16,000 (HHS, 2024).

Shifting Focus Presents New Challenges

Early childhood education experts suggest that providers might need to pivot to serving younger children to remain viable. However, this transition is complex. Teaching infants and toddlers requires different expertise and smaller staff-to-child ratios. Moreover, a survey revealed that only 20% of early educators are interested in teaching this younger age group.

David Frank, who operated a preschool in Culver City, is also closing his doors due to a significant drop in enrollment. His school lost a third of its students after TK became an option. “I’m happy that children will have good, free education,” Frank stated. “But as a person trying to run a business… it’s just no longer a viable plan to stay open anymore.”

Advocates Call for Increased Investment

While California’s TK rollout is a major step, advocates argue that further, substantial investment is crucial to support the state’s youngest children and the providers who serve them. Efforts to overhaul payment systems to reflect the “true cost” of care have been deferred, leaving providers in a precarious position.

“TK was one of the key things we’ve been advocating since it was passed,” said Patricia Lozano, executive director of Early Edge California. “But that’s just one piece. I think the whole system itself is problematic. It’s underfunded.”

Lozano pointed to New Mexico’s model, which uses oil and gas revenue to fund childcare initiatives and boost teacher pay, as a potential path forward for California to ensure a stable and well-funded childcare system.

Meanwhile, Milena Bice faces an uncertain future. Lacking a bachelor’s degree or teaching credential, she cannot easily transition to public school teaching. For now, she is keeping her childcare license, holding onto the possibility of reopening someday.