Competing for Students, Not Federal Funding, Is Still the Best Preschool Policy

Washington, DC, is not exactly known for being on the cutting edge of innovation—especially when it comes to competition in education.

Nearly three years ago the Department of Health and Human Services’ Administration for Children and Families (AFC) made headlines for its “controversial” plan requiring Head Start preschool providers to compete for renewed federal funding. The rule changes:

… implement statutory provisions of the Improving Head Start for School Readiness Act of 2007 to establish a system of designation renewal to determine if Head Start and Early Head Start agencies are delivering high-quality and comprehensive Head Start and Early Head Start programs that meet the educational, health, nutritional, and social needs of the children and families they serve and meet program and financial management requirements and standards. This system of designation renewal will determine which grantees must compete for on-going funding.

Prompting this change, in part, were 2005 findings from the GAO documenting widespread financial “improprieties” due to questionable oversight by the ACF of some $6.8 billion that were supposed to help more than 900,000 Head Start students in fiscal year 2004. According to the GAO:

Head Start grantees who were judged out of compliance in a review by ACF in 2000 with one or more of the program’s financial management standards were about as likely to remain out of compliance as attain full compliance over the succeeding 3 years. …After working with one grantee to correct severe financial management problems for 3 years—including failure to account for over $400,000 in grant funds that were not spent on Head Start services to children and their families—ACF notified the organization that it no longer would receive funding. While ACF may terminate grantees with serious financial weaknesses such as recurring failure to comply with federal management standards, this process is rarely used: ACF most often encourages grantees to voluntarily relinquish their grants. In a small number of cases, ACF must proceed with formal termination, which can be difficult and lengthy owing, in part, to grantees’ right to continued funding during its appeal, regardless of merit, and their ability to finance appeals with grant funds.

For all the tough-sounding talk, not much has really changed under the Designation Renewal System (DRS) implemented in 2011. Most Head Start providers will have their five-year grants almost automatically renewed. Just the worst offenders will have to compete to keep them, roughly 125 (here and here) out of more than 1,600 total grantees, and most of them will likely have their funding renewed, too.

Evidence shows that federal Head Start program funding hasn’t noticeably improved preschoolers’ academic outcomes. Yet President Obama wants universal government preschool for all American four-year-olds—whether parents want it or not.

A better solution is universal options for all. Let taxpayers keep the money that would otherwise be funneled into failing fed ed programs such as Head Start. Let parents save for the preschool options they prefer. Keep them in charge of whether their children’s schools are performing or not. And, make preschools compete for students and their tuition dollars.

But this kind of liberty for parents is the last thing DC politicians or their (virtually lifelong) federal grantees want.