Niche Resources

Parents’ Guide to Affording Preschool

As your little one grows and develops through their toddler years, preschool comes into focus more and more each day. If you’re feeling overwhelmed with both the sticker shock and competitive nature of finding a preschool, you’re not alone. 

As of 2017, parents spent an average of nearly 30% of their income on center-based care. Though the average preschool price tag vastly varies by state, this issue is reaching a tipping point for many families. Some parents find themselves turning down work in order to afford childcare altogether, especially in the 28 states where the average cost per family surpasses a cost of public undergraduate education.

Educators experience these differences in rural areas as well. Erica Mackey, CEO and co-founder of MyVillage community childcare program noted, “Especially in Montana, and really any rural communities where the average wage is below the national average, many of our families are struggling to get by. We often hear that childcare is as much or more than a family’s mortgage.”

So, how can you prepare to pay for preschool for your 3 or 4-year-old entering these formative years? Tax incentives, financial aid and a rise in universal preschool may factor into your options.

We’ll explore the importance of preschool as well as traditional and modern approaches to making a financially healthy decision.

The Role of Preschool in Childhood Development

Preschool acts as a bridge from daycare to Kindergarten. Without it, a significant achievement gap can begin to grow as early as age five. This gap extends further into a person’s life as well. Two prominent studies point out that children with quality early childhood education are less likely to repeat grades or require special education, and more likely to graduate high school. Later in life, according to one study, those with a preschool education had higher changes of owning homes and earning $2,000 more a month than those who did not.

The gap between families with and without access to affordable preschool is clear between low and high-earning houses. Though state-funded, Head Start and special-needs preschool programs exist, their reach varies greatly from state to state. For example, as of 2015, 11 states served less than 10% of children under four three public programs. Other areas like New York City, however, offer universal free pre-K for 4-year-olds. A huge part of the problem (or solution) comes down to where you live.

7 Popular Types of Preschool: Which One Fits Your Child?

Starting Your Search

Though finding an affordable program is key, how do you find a high-quality program that aligns with your values and children’s learning style? Richard Huffman, CEO and Founder of Celebree School based in Maryland and Delaware, advises parents to look at national standards ratings. “I suggest researching your states’ Quality Rating Information System (QRIS), which is easy to do online. You’ll likely find multiple centers that have committed to continuous quality improvement and thus have achieved quality ratings based on national standards. These quality ratings affect subsidy or scholarship availability for families to help absorb the cost of high-quality care.”

Public Preschools

Your local area plays a large role in how much you’ll spend on preschool programs. Begin by diving into the research both on public and private academies in your county. The Department of Education website provides links to each of your states specific page. Here you can search in the Early Childhood Education section for available schools and procedures for enlisting.

Families who fall below the poverty guidelines may also qualify for local Head Start and Early Head Start programs. This service provides early education in a range of locations, from schools and childcare centers to parents’ homes.

Many states additionally offer vouchers to help low-income families afford preschools. Qualification often comes down to income, residency and employment status. provides links for each state’s financial need program for care.

You can also peruse the Niche’s list of top public preschools your area. If your town’s preschool tuition is too high, try branching out to nearby, commutable areas. You may be surprised at the change in cost just several miles over.

Private Preschools

As you search through private preschools in your area, make a note of the following:

  • Tuition
  • Additional costs
  • Available scholarships
  • Financial Aid Opportunities

The Berkeley Parents Network, a forum for parents in the San Francisco Bay area, recommends starting your search the January before your child turns three. School tours typically run between December and March, so it is very helpful to get a head start if you live in a competitive area.

Community-Based Preschools

Cooperative and community-led programs grew from the need for affordable and personalized preschool curriculum. Cooperative preschools invite parents from the community to directly guide, assist and manage in their child’s early education. Local parents hire their choice of educator and facilitate the daily education of their own students, often spending time managing the administration or in-classroom care of the students. Though co-op preschools still depend on tuition, it may be less than independent preschools due to the parental volunteer support.

Community preschools and childcare programs include organizations like MyVillage, currently based in Colorado and Montana. Two mothers launched the program after experiencing the lack of affordable and high-quality childcare opportunities for their own children. The company now supports individual educators to run curriculum-based, licensed programs independently. 

CEO Erin Mackey explains, “We’ve found that through education and building relationships, folks become more open to the idea once they learn about the many benefits of neighborhood, home-based care, especially when it’s fully licensed and of the highest quality.”

Half or Full-Day Programs

Many preschools offer varying tuitions based on how many days a week and hours a day your child attends school. If you have work flexibility or outside childcare, half-week and half-day programs are a budget-friendly option. These options may also vary by your child’s age as well, so be sure to clarify all tuition options as you complete your search.

Payment Assistance

Tax Credit and Savings Accounts

Of the three major child tax credits, the Child and Dependent Tax Credit pertains to costs spend on childcare for those under the age of 13 at the end of the calendar year. You may use up to $3,000 per child – or a total of $6,000 for two or more – to calculate the tax credit for these expenses. Many states also have individual credits for childcare-related expenses, so it is worth checking your state site for more information.

If you qualify for a Coverdell Education Savings Account (ESA), you can set aside up to $2,000 a year for qualifying education expenses from pre-K through college.

Your employee may also have a Flexible Spending Account that allows you to put aside money from your paycheck to pay for childcare. Ask at work to see if this kind of program is available, or may become available. It’s worth noting, however, that typically a family can only use the Child and Dependent Tax Credit or an FSA, so it’s best to do some research with an accountant or with your HR department to determine which option is better for you, if both are available.

Financial Aid, Scholarships and Grants

In an effort to improve accessibility to all families seeking a private preschool education, many academies offer financial aid. The Parent Financial Statement (PFS) considers a family’s financial eligibility for assistance for donor-sponsored grants. Schools often balance a child’s application strength and family financial need when choosing recipients. Unlike federal college financial aid, these awards are offered as grants and therefore are not paid back at the end of the program. Ask the admissions department of prospective schools early on in the application process so you can stay on top of necessary steps.

Though they are less common, federal organizations offer grants to families looking to offset to the cost of either public or private preschools. Government-sponsored Childcare and Development Fund (CCDF) offers support to low-income families

The Bottom Line

Even if access to preschools is improving, affording a program today is a top challenge for parents. Begin by exploring your local options, as well as what services or assistance your state might offer. If you’re considering moving to a new area with a young child, take a look at the available schools and costs for that area before you make your final choice.

Discover preschools in your area

Author: Ginny Bartolone

Ginny is a freelance writer and actress based in Montclair, NJ. She regularly contributes to a range of wedding, lifestyle and spirituality websites, as well as in her own blog, She is also currently completing a book about her two hikes across Spain.