10 Critical Insights Into the State of Preschool Funding and Quality in America
State-funded preschool programs are welcoming more four-year-olds than ever before, yet concerns about uneven quality and access persist. A new report from the National Institute of Early Education Research (NIEER) reveals a fragmented landscape where some states race ahead while others lag or haven't even started. Here are 10 key takeaways from the 2025 'State of Preschool' Yearbook that every parent, educator, and policymaker should understand.
1. Record Enrollment in State-Funded Preschool
For the first time, enrollment of four-year-olds in state-funded preschool has reached an all-time high. More children than ever are attending these programs, reflecting growing demand and policy focus on early education. However, this surge does not automatically translate to high-quality experiences, as the report warns that quantity shouldn’t overshadow classroom standards.
2. Funding Reaches Nearly $14.4 Billion – But Is Unevenly Distributed
Total state spending on preschool peaked at roughly $14.4 billion, a historic figure. Yet this headline number masks deep disparities. Just three states – California ($4.1 billion), New Jersey ($1.2 billion), and New York ($1 billion) – accounted for 45 percent of all pre‑K spending. While over two dozen states increased their budgets, the concentration of funds means many children still miss out on well‑resourced programs.
3. The ‘Haves’ and ‘Have‑Nots’ Problem
NIEER’s lead author Allison Friedman‑Krauss warns that the rush to expand access risks creating a two‑tier system: some children enter excellent programs while others attend underfunded ones. “We’re trying to make sure states are thinking about quality, not just access,” she says. Without quality benchmarks, the gap between privileged and underserved communities may widen.
4. Spending per Child Varies Dramatically
Adjusted for inflation, state spending per enrolled child ranged from over $15,000 in New Jersey, Oregon, and Washington, D.C., to less than a few thousand in other states. The national average increase was only $45 more per child than the previous year – a modest rise compared to the 16‑fold larger increase seen the year before. Six states spent more than $10,000 per child; twenty‑eight raised their per‑child funding overall.
5. The Rate of Investment Is Slowing
Despite the record total, growth in preschool spending is decelerating. The inflation‑adjusted increase in 2024‑2025 was just a fraction of the prior year’s jump. This slowdown raises questions about whether states can sustain the momentum needed to improve both access and quality, especially as economic pressures mount.
6. Seventeen States Actually Cut Preschool Spending
After adjusting for inflation, more than a third of states – 17 in total – spent less on preschool in 2024‑2025 than in 2023‑2024. The report links these cuts to overall state budget deficits and declining enrollment in some regions. Yet the researchers note that budget shortfalls don’t automatically force cutbacks; it’s a matter of priorities.
7. New Jersey Bucks the Trend Despite a Deficit
New Jersey faced a budget deficit but still invested an additional $100 million to expand preschool programs for all. NIEER director Steve Barnett calls this a “conscious decision” to prioritize early education. “If a state chooses to spend less, you have to ask if that’s really a priority,” he says. This example shows that commitment can overcome fiscal constraints.
8. Teacher Compensation and Ratios Need Improvement
Increased funding often goes toward reducing teacher‑to‑student ratios and raising teacher pay – both long‑standing concerns. Low compensation has historically hindered recruitment and retention of qualified educators. While some states have made strides, the report emphasizes that high‑quality preschool depends on well‑supported teachers.
9. Quality Must Keep Pace with Access
NIEER’s annual report stresses that simply enrolling more children isn’t enough. Quality measures – such as curriculum standards, staff qualifications, and learning environments – are essential. The current focus on access risks pushing quality aside. Friedman‑Krauss urges states to “remember that quality is what produces the long‑term benefits of preschool.”
10. The Race Is Not Yet Won
The report likens achieving universal, high‑quality preschool to a race: some states are nearing the finish line, others have stumbled, and a few haven’t left the starting line. To avoid creating a system of haves and have‑nots, leaders must invest equitably and uphold strong standards. The next few years will determine whether America’s preschool promise becomes reality for all children.
In conclusion, while the record enrollment and funding figures are encouraging, they tell only part of the story. The real challenge lies in ensuring that every child – regardless of zip code – attends a preschool that truly prepares them for success. Policymakers must now balance expansion with continuous quality improvement, using data from reports like this to guide smart investments.