Starting early

For a struggling Colorado school district, full-day preschool — and the unusual way it’s paid for — shows promise

A staff member works with full-day preschoolers at Fairview Elementary School in 2016,

Promising first-year results from a study of full-day preschool in a high-poverty suburban Denver school district have stoked optimism about a new financing approach officials are testing there.

It’s called Pay For Success and has gained traction nationwide in recent years as a way to pay for social programs that yield long-term dividends but are expensive to launch.

The struggling 9,600-student Westminster Public Schools is using a version of the complicated financing model, also known as social impact bonds, to fund and rigorously evaluate full-day preschool.

While similar projects in Salt Lake City and Chicago have been underway longer, Westminster’s three-year pilot project provides the first Colorado case study of Pay For Success as a preschool expansion tool.

It’s also a key component of the early childhood efforts outlined in the district’s state-mandated improvement plan. Only about a third of Westminster kindergartners meet expected benchmarks when they start school.

This year, about a quarter of the district’s 600 preschoolers attend full-day programming — at a cost of about $10,000 per student.

The full-day classrooms are the most expensive in the district because of state class size and student-teacher ratio requirements, but not as pricey as some high-quality preschool programs elsewhere.

The idea behind Pay For Success financing is that private investors or philanthropists pay upfront for social programs and get repaid with interest if those programs save public money by preventing the need for costly services such as special education or reading remediation. If a project doesn’t yield the hoped-for savings, the investors lose some or all of their money.

Westminster Public Schools dipped its toes into Pay For Success waters last year, offering full-day preschool to 112 4-year-olds at seven elementary schools. Two foundations — Gary Community Investments and the Ben and Lucy Ana Walton Fund of the Walton Family Foundation — put up a combined half million dollars for the project.

(The Walton Family Foundation and Gary Community Investments — through the Piton Foundation — are Chalkbeat funders).

Westminster’s pilot is not a full-fledged Pay For Success transaction because the state is not a partner in the agreement as would typically be the case. In addition, the project agreement doesn’t require the two funders to be repaid fully if the district’s full-day preschool program yields the hoped-for savings.

However, the gold standard study by outside evaluators comparing full-day and half-day preschoolers is standard Pay For Success fare. It’s also a key part of what funders and other school districts may be looking at as they consider preschool expansion efforts.

So far, Westminster’s results look good.

Full-day preschoolers there performed better than their half-day peers on a bevy of early childhood assessments that measure everything from early literacy to social and emotional development.

“We’re seeing some real statistical significance in terms of full-day (preschool),” said Mat Aubuchon, the district’s director of early childhood education.

Further evaluations over the next two years will provide more definitive results, he said.

In addition to preliminary data gleaned from the official evaluation, Aubuchon said the district has discovered some unanticipated benefits of the full-day program. These include higher attendance rates in full-day preschool classrooms and increased likelihood that full-day preschoolers will come back for kindergarten.

While 60 percent of half-day preschoolers returned for kindergarten this year, that number was 76 percent for full-day preschoolers.

Asked if the district’s full-day preschool initiative might continue beyond year three as a full-blown Pay For Success project, Aubuchon said, “I certainly hope so.”

Steffanie Clothier, investment director for child development at Gary Community Investments, said Westminster’s project will provide a valuable evidence base for other districts interested in preschool expansion even if they don’t use Pay For Success.

“I think Pay For Success is a great way to help understand the financing and short term and longer term savings from preschool programs,” she said. “But I don’t think it’s essential as a funding stream.”

A new floor

Colorado’s new minimum wage means raises for child care workers and tuition increases for parents

PHOTO: Ann Schimke
Loveland's Teaching Tree Early Childhood Learning Center was one of the first two centers in the state to get a Level 5 rating in the Colorado Shines rating system.

Child care teachers and assistants absolutely deserve the raises that come from Colorado’s new minimum wage of $10.20 an hour, their bosses say, but the pay increases also mean that many providers will pass on the new expenses to tuition-paying parents already stretched thin by child care costs.

“I don’t know how much more parents can pay,” said Diane Price, who heads a nonprofit network of seven centers in Colorado Springs.

In some parts of the state, early childhood advocates also worry that the raises mandated by the minimum wage hike will cause some workers to lose public benefits by pushing their income just above the eligibility threshold — making it harder, not easier to make ends meet.

In a field working to professionalize its ranks, pay its workers more, and raise awareness about the educational and economic value of quality child care, many observers say the minimum wage increase is a step in the right direction.

“It’s an important move,” said Christi Chadwick, director of the “Transforming the Early Childhood Workforce” project at the nonprofit Early Milestones Colorado. “The thing I struggle with is we’re still not getting people out of poverty and paying them on par with the public school system.”

Price, the president and CEO of Early Connections Learning Centers, said, “Shame on us that we even have to have this discussion that early educators are in a category that pays minimum wage.”

The latest minimum wage increase, which took effect Jan. 1, is the second of four annual increases mandated by a ballot measure approved by Colorado voters in 2016. The last step of the phase-in process will boost the minimum wage to $12 in 2020.

Colorado is among 29 states — most in the northeast and west — that have set a minimum wage higher than the federal rate of $7.25 an hour, according to the U.S. Department of Labor.

Child care providers here say advance planning and clear communication with parents have helped them incorporate raises into their budgets.

Price, who raised tuition slightly at her centers last August, said she anticipates a budget hit of about $600,000 over the four-year phase-in period.

But that’s not just because her lowest paid staff members are getting raises to comply with the minimum wage law. Like many other child care directors, she’s giving raises across the board out of fairness to veteran employees.

Price said she didn’t want entry-level employees to catch up with those who already hav a Child Development Associate credential or an associate’s degree.

Heather Griffith, who leads the for-profit Young Peoples Learning Center in Fort Collins, is taking the same approach. Her whole staff, except two brand new employees, have received raises.

She’s already sent out a letter notifying parents that tuition will go up 6.5 percent on February 1 – that’s an additional $16 a week for a full-time preschool slot. It’s the second of three tuition hikes Griffith will institute during the minimum wage phase-in period.

While the higher costs are hard on parents, “it’s a lot tougher for these teachers to survive on non-livable wages,” Griffith said. “I’m 100 percent in support of this minimum wage hike.”

Griffith hasn’t gotten much pushback over the impending tuition increase. The thriving economy helps. Also, she said, parents like the care her centers provide and wouldn’t be able to find it for much less unless they switched to unlicensed care, which is mostly unregulated.

Anne Lance, who heads the non-profit Teaching Tree Early Childhood Learning Center in northern Colorado, said she began planning — and frontloading — wage increases for all staff shortly after the 2016 ballot measure passed.
Currently, her entry-level teaching assistants start at $10.50 an hour even though she’s only required to pay $10.20.

“I had to get way ahead of the game … so in a couple years when it gets closer to that $12, it’s not going to kill me,” said Lance, who operates one center in Loveland and one in Fort Collins.

While the center’s two sites serve many low-income children who qualify for state child care subsidies or state-funded preschool slots, there are some tuition-paying families in the mix, too.

It’s those parents who may feel the sting of the minimum wage increases over the next couple years. Lance said she’ll keep her tuition increases to a modest 3 percent this year, but may have to jump up to 5 percent in 2019 and 2020.

On average, lead teachers with several years of experience at Teaching Tree make about $13.50 an hour. While that’s above the minimum wage, it’s not much to live on for employees on their own or those who are single parents, Lance said.

In Colorado, about one-third of child care teachers qualify for some kind of public assistance to cover housing, food, health insurance, or child care costs, according to a 2017 survey of child care workers in the state.

Chadwick, of Early Milestones, said during visits last fall to the San Luis Valley and southeastern Colorado, early childhood leaders explained that some child care workers were quitting their jobs due to fears they would lose government benefits when minimum wage-related raises took effect.

To alleviate such concerns and make child care a profession that pays a living wage, more substantial raises are needed. But Chadwick and other leaders don’t expect further funding to come from a state-level effort.

Instead, they say it will be locally-funded initiatives — already underway in some Colorado communities — that pick up the slack.

“We have to pass things like mill levies and taxes that support early childhood,” said Griffith, of Young Peoples Learning Center. “We have to do it. We have to say yes to these things if what we want is a community that has educated kids ready to go into kindergarten.”

year in review

Early childhood discipline, child care deserts and funding challenges in the spotlight during 2017

Malanna Newell is a toddler teacher at the Mile High Early Learning center in Denver's Westwood neighborhood. She started as a teaching assistant before taking Mile High's Child Development Associate training last fall.

Amid national debate on the disproportionate number of suspensions and expulsions given out to young boys and children of color, Colorado lawmakers and educators grappled with the best approach to discipline in 2017.

The year kicked off with a bill in the legislature to curb suspensions for early elementary and preschool students — a shift that would have put Colorado on the forefront of school discipline reform, some observers said. Although the bill had a broad array of backers, a Republican-controlled Senate committee killed the proposal after last-minute opposition from a group of rural school district leaders. Some of those leaders said suspensions weren’t a “rural problem,” but a Chalkbeat analysis found otherwise.  

Despite the defeat, advocates of the bill expect a renewed push for the measure during the 2018 legislative session.

In the meantime, Colorado’s two largest school districts — Denver and Jeffco — spearheaded changes to reduce the number of suspension handed out to young children. In June, Denver’s school board instituted a policy limiting the suspension of preschool through third grade students, though some educators worried they weren’t being given enough support to handle kids who misbehave.

In Jeffco, after Chalkbeat wrote about the district’s high rate of early elementary suspensions, administrators commissioned a report on the issue with recommendations to increase the use of restorative justice practices and other alternatives to suspension.  

Also in 2017, local early childhood leaders launched or expanded efforts to address key problems in the field — including teacher recruitment and retention and kids’ sometimes rocky transition to kindergarten.

At the same time, some early childhood advocates were forced to reckon with the perennial lack of funding that plagues the industry and constricts families’ choices. One of Denver’s most well-known child care providers, Clayton Early Learning, closed one of its two facilities last summer — a move observers said spotlights the high cost of quality child care.

But there were also bright spots in the funding landscape — some growing out of local efforts in Colorado’s rural towns and resort communities. A preschool in Holyoke found a way to give staff members generous raises and a growing number of cities and towns are getting new dollars for early childhood programs through sales or property taxes.

In Denver, several efforts — using a combination of public and private funds — aim to improve child care options in the city’s Elyria-Swansea neighborhood, which is designated a “child care desert.”

At the state level, officials promoted recently-created financial incentives for child care centers with top quality ratings, though some providers say earning those ratings is too much work.

Looking ahead to 2018, early childhood advocates hope to renew a tax credit that helps child care providers make ends meet. Plus, winners of a new early childhood innovation competition will get financial help to scale up their ideas.