Why America Should Have Universal Early Education for Young Children

Many Americans with young children want to prioritize both their family and their work. But childcare and preschool can be expensive. For families with incomes below $18,000 who pay for out-of-home care, the average cost amounts to 40% of their household income. For those with incomes between $18,000 and $36,000, the average is 20% of their income. Faced with such unaffordable expenses, some parents settle for care that is mediocre or poor. In other families, the mother may simply forgo employment.

We can do better. The solution is universal early education for kids aged one to four.

The employment rate for U.S. mothers whose youngest child is six to sixteen years old is comparable to the rate for such mothers in Denmark and Sweden. But for mothers with a child younger than six, the U.S. employment rate is 15 percent lower. Affordable, good-quality early education isn’t available to many American families with very young children, but it is available to all Danish and Swedish families at early education centers. In Denmark and Sweden, early education teachers get training and pay comparable to elementary school teachers, so the quality of early education tends to be high, and the cost to parents is capped at less than 10% of a household’s income.

Early education has another benefit: it helps to equalize opportunity by improving the capabilities of children from less advantaged homes. Researchers have not yet defined exactly how large this equalizing effect is, but even if it turns out to be small, early education programs still offer the vital benefit of enabling working parents to better handle and balance their obligations at work and in the family.

If the United States decides to institute early childhood education, what form should the effort take? To contain costs, some recommend that public funding for such programs be focused on children from households with low incomes. But a universal system – like America’s universal public school system – would have several important advantages. First, it isn’t just low-income parents who struggle to find good-quality care that’s affordable. Middle-class parents do too. Second, children can be disadvantaged in life by features of family structure or parental behavior that do not occur just among low-income people. If early education programs target only low-income households, many children who need help will be left out. Third, researchers know that children develop cognitively and learn social skills through interaction, and children from economically disadvantaged homes gain by mixing with kids from middle-class homes. Chances for many valuable interactions would be lost if early education was set up only for the poor.

Universal early education doesn’t have to be accomplished by a government monopoly. Providers of early education can be a mix of public agencies, nonprofit organizations, and private groups. Parents could be given a voucher and allowed to choose among providers that meet quality standards. Some advocates prefer exclusively public provision, but Denmark and Sweden allow private providers, and the United States allows private charter schools to participate in publicly-funded elementary and secondary education. Similarly, in U.S. Medicare and Medicaid programs, public funds are used to pay for provision by private companies that meet certain standards and to buy services from private doctors and hospitals.

Can the United States afford to expand education this much? A good-quality universal early education system for one-to-four-year-olds would cost somewhere in the neighborhood of one percent of the Gross Domestic Product. This assumes that three-quarters of children would be enrolled and the cost would be about $12,000 per child, roughly what we spend on schools for kindergarten through twelfth grade. Denmark and Sweden spend about 1.5% of their Gross Domestic Products, but the U.S. economy is larger per person, so we wouldn’t need to spend quite as much of it to support a similarly good system.

Though tax revenues would have to be increased, for most Americans the impact would be small. If the distribution of the required new tax payments were the same as for existing tax payments, households in the bottom fifth of incomes would pay $133 more per year, those in the lower-middle fifth $333, those in the middle fifth $666, those in the upper-middle fifth $1,266, and those in the top fifth $4,200. In practice, the actual new costs would be a bit smaller, because U.S. governments already spend some public money on early education. The federal government funds Head Start, some special education services, and tax breaks for childcare; and some state governments fund preschool for four-year-olds and subsidize childcare for poor families.

Moreover, some of the needed revenue can come from user fees. Early education is different from police protection and health care, the kinds of services that almost no one opts to go without. Even if good early education programs were readily available, some families would choose not to use them because they prefer to provide stay-at-home parental care for their young children. And of course, some American adults have no children. This set of realities argues for having parents who do want to use early education pay something – even parents with low incomes. Here too the Nordic approach is sensible; in Denmark and Sweden programs charge on a sliding scale, with the fee rising in proportion to family income, but never going above 10%.

In the United States, getting to universal early education is likely to be a long and tricky political slog, just as earlier breakthroughs to eventually popular and taken-for-granted social programs have been. The most likely route runs through the states and cities. Places as diverse as Oklahoma and New York City have already moved to provide programs for four-year-olds, and as other states and cities follow suit, the pressure will mount for the federal government to get involved, so that Americans, wherever they may live, can gain access to good-quality early education programs that promise valuable benefits for children, parents, and the entire U.S. economy.

How to Get Rid of Your Student Loan Debt While Working at a Nonprofit

student loans

All across the country, graduates are taking advantage of various loan repayment programs to help lower their monthly payments and improve their lives. If you plan to work for a nonprofit or in the public sector, it’s smart to explore all of the loan repayment options in front of you – including loan forgiveness.

When Michelle Argento graduated college with $25,000 in student loans, she knew the path forward wouldn’t be easy. As a music education major with little earning potential, she was right to worry about her new $290 monthly payment.

Fortunately, Argento started learning about the federal income-driven repayment programs available right away. And once she qualified for Income-Based Repayment (IBR), she watched her new payment shrink to just $27 per month.

While Argento’s situation has changed over the years, she still benefits on a sliding scale. A marriage and a toddler later, she and her husband pay $350 per month towards their $40,000 in combined student loans. If the couple were on the Standard Repayment Plan, she would owe more like $690 per month, she said.

Instead, the $340 per month they save has meant less stress and more opportunity.

“Having been on IBR for now six years, I have never, ever felt crushed or overwhelmed by my loans,” said Argento. “That flexibility also means being able to take risks in my career by moving to owning my own business, being able to splurge a bit on experiences such as traveling to Europe, and considering going back to school while continuing paying down debt.”

The icing on the cake, however, is that income-driven repayment plans like IBR will forgive any remaining after 20-25 years of payments (assuming there’s any debt left over). The only downside is that once the debt is forgiven, you’re on the hook for income taxes on that amount that same tax year.

Of course, IBR isn’t the only income-driven plan out there. Borrowers can also benefit from plans such as Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), and Income-Contingent Repayment (ICR). While each plan works in its own unique way, they all base your monthly payments on your discretionary income and eventually lead to student loan forgiveness.

By and large, income-driven repayment plans were created for graduates just like Argento – people with large amounts of debt and lower-than-average earnings. That’s why many people who work at nonprofits flock to income-driven repayment plans; instead of struggling to afford huge monthly payments, they can enjoy reasonable out-of-pocket expenses and continue working in jobs that let them give back.

Another Option: Public Service Loan Forgiveness (PSLF)

In addition to income-driven repayment, students interested in working for the public good can look into Public Service Loan Forgiveness (PSLF).

With PSLF, graduates can have their student loans forgiven after working in a qualified public service position and making 120 consecutive payments on their loans. Payments made after October 1, 2007 qualify and the first round of PSLF participants will receive forgiveness beginning this October.

Ginger, a psychotherapist who blogs at Girls Just Wanna Have Funds, uses PSLF to make her student loan payments bearable. Thanks to the reasonable loan payment she has achieved through PSLF, Ginger figures she’ll save 15 years of payments and at least $100,000 on interest if she sticks with it.

And she should. Unlike other income-driven plans that require you to pay taxes on forgiven debt, PSLF wipes your slate entirely clean. If Ginger is able to stay on her current program for 10 consecutive years, she’ll have zero debt – and no trace of a tax bill – once it’s over.

Although she’ll need to work in public service the entire time, this is a huge benefit for her and others like her to look forward to.

Picking a Repayment Plan

With the right plan, you can settle on a monthly payment you can actually afford and move on with your life. Here are some steps that can help:

Step 1: Explore loan forgiveness options. While we touched on the main loan forgiveness programs in this article, you should research more on each before you sign up. There are also many state- and school-based repayment and forgiveness programs. Check out this comprehensive guide on forgiveness programs to find the right fit.

Step 2: Consider your long-term career plans. While income-driven repayment and PSLF can drastically reduce your monthly payments now, that can change quickly if your income surges or your career changes course. Before you sign up, consider how your future decisions might affect your loan payments.

Step 3: Determine how comfortable you are with debt. While loan forgiveness programs can lower your monthly payment and lead to total debt forgiveness, they also leave you in debt for a longer stretch of time. If you don’t like the idea of debt, you might be better off making extra payments and paying off your loans early instead.

Step 4: Sign up for a plan and stick with it. If you decide you’re okay with debt as long as it’s eventually forgiven, you’re a good candidate for loan forgiveness plans. To get the most out of them, however, you should stay the course and see them to the end. Ten to 25 years might seem like a long time, but it will be worth it when you’re finally debt-free.

If you’re worried how you’ll handle your loans as a non-profit worker, it’s smart to explore all of these opportunities to see if one might fit your needs.

With the right repayment plan, you could score an affordable monthly payment and complete forgiveness in the end. If you’re in debt and struggling, that’s the best thing you can hope for.

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