Should Upper Middle Class Tots Get Subsidized Student Loans for Pre-School?

Should parents go into debt to pay for "high-quality" child care? (Michael Kappel, flickr)

Maybe their parents should be saving for college instead of going into debt to pay for pre-school. (Michael Kappel, flickr)

Student loan debt may be crippling everyone from recent college grads to senior citizens, but now New York parents will be able to start piling on the educational debt when their children are mere toddlers (the inverse, we assume, of saving for college?).

Today, City Council speaker and mayoral candidate Christine Quinn announced an initiative to offer middle and upper-middle class parents subsidized loans for daycare and pre-school with her council colleague and candidate for Manhattan borough president Jessica Lappin.

“Early childhood education is one of the most important investments a parent can make,” said Ms. Quinn in a statement about the program. “But too often, quality child care is out of reach for middle class families. The Middle Class Child Care Loan Initiative is a smart program that will help parents pay for child care and give New York City’s next generation a jump start on their education.”

The question, however, is how smart it is for any parent to take out thousands of dollars in loans—even ones with a 6 percent interest rate—to cover the cost of “quality” daycare or preschool. (The program will give families loans of up to $11,000 a year for children between the ages of 2 and 4.) While the program is restricted to the city’s wealthier middle class denizens—applicants must make between $80,000 and $200,000 a year to qualify, submit to financial screening and have strong credit histories—taking out a loan to cover a basic and ongoing expense like child care seems, at best, unwise and at worst, financially ruinous. (Perhaps there is a reason that this program is the first of its kind in the nation?)

While Pre-K education is undeniably important, the connection between it any kind of remunerative pay-off is far more tenuous than that of a college degree. Statements, like those made by one early childhood education advocate that “early childhood education is a sound investment that pays dividends well into adulthood” should always include an asterisk: those “dividends” will not, in all probability, be monetary. “High quality daycare” (whatever that means) and pre-school are simply not things that parents should look at as likely to payback financially. Pre-schools and primary schools, parents’ education and income level, the child’s intelligence, its friends’, its environment, emotional and behavioral issues—all these things factor into a child’s chances future success. It is not, as college is, a form of specialized training required for higher-paying fields.

If we, as a society, do believe that pre-K is important, important enough to offer upper middle class families subsidized loans to pay for, then it’s something that we should seriously consider offering universally rather than encouraging families to go thousands of dollars in debt “to secure a bright future for their children.” Nor do many parents’ day care bills end when their children reach kindergarten age—usually they continue to come in each month, even if they are lower than they once were.

There’s also the question of whether giving a family earning $190,000 a year a pre-school subsidy will level the playing field, or make it even more unequal. Ostensibly, rather than making the difference between sending a child to preschool or keeping him at home, such loans might be used more to help the middle class’s upper crust pay for elite preschools, putting more distance between very young children in a city that is already plagued by income inequality and where competition for gifted and talented slots is incredibly fierce and many would argue, unfair, given the intense coaching and drilling engaged in by families who can afford it. Families making $200,000 a year are unlikely to forgo pre-school because of financial considerations; a subsidized loan will simply make them able to afford the kind of top tier pre-school that lower-income children getting subsidized childcare will never be able to attend.

Moreover, the loan initiative seems to leave a number of middle-income families unserved. While the Administration for Children’s Services offers subsidized child care to families that fall below 275 percent of the federal poverty level, there are a number of families earning more than that who do not make at least $80,000 a year. Namely, families of three earning between $53,707 and $80,000, families of four earning between $64,762 and $80,000 and families of five earning between $75,817 and $80,000.