Preschool scholarships in Minn. tap market forces

Five-year-old Madelynn Antrim's days are just packed when she goes to her new $1.4 million preschool in a working-class neighborhood of St. Paul.

The words tumble out as she explains. There's a cardboard castle where she plays princess - but not always because the crown hurts her head - computers with reading games, books with pictures of dragons and her favorite spot, a shelf with beans growing from Styrofoam cups, clear tubes of weird liquids and an hourglass.

"This is where we know what science is!" she explains, stretching out her arms to take it all in.

Madelynn's family couldn't afford to send her to this nearly $12,000-a-year preschool without a scholarship from an unusual program inspired by a former Federal Reserve economist and backed by some of the most influential people in Minnesota business. Democratic Gov. Mark Dayton is a fan and a bipartisan group of lawmakers wants to expand it in an effort to shrink the state's yawning achievement gap between poor and middle-class students.

Unlike many programs that pay providers directly, the Minnesota Early Learning Foundation, or MELF, has enrolled 600 poor St. Paul families over three years and sent them out with scholarships of government and foundation money worth up to $13,000 a year to find their own high-quality preschools.

"One thing that economists like is competition; it gets you sustainable results," said Art Rolnick, the former director of research for the Federal Reserve Bank of Minneapolis. His work on the economic benefits of early childhood education spurred the program and he sits on the foundation's board.

The program includes a preschool rating system called Parent Aware. The foundation created a definition for "high quality" based on getting children ready for school, then asked preschools to apply. Only those that met the foundation's criteria can receive scholarship money.

The preschools are gauged in several ways, including parental involvement, creating a positive environment, teaching from a research-based curriculum, regularly assessing children and using those assessments to guide classroom time and goals for children.

Rolnick said making those ratings available to parents created a rational market for early childhood education from scratch.

"We are engaging the parent and they can figure out what works best," he said.

Educators agree on the importance of good pre-kindergarten programs for future academic success and their potential to close Minnesota's achievement gap, which is among the largest in the nation. Rolnick argues for a societal benefit, too; he and former Fed colleague Rob Gruenwald calculated that every $1 put into high-quality preschool for at-risk children can result in a $16 return to society in fewer social services, lower criminal justice costs and additional taxes paid.

The Minnesota proposal is similar in concept to what some other states are doing, but stands out for its emphasis on targeting comparatively large scholarships to poor families and its reliance on market forces to drive continuous improvement.

Geoffrey Nagle, director of Tulane University's Institute of Infant and Early Childhood Mental Health, called Minnesota's system unique.

Nagle's worked helped develop a system in Louisiana that pairs a child care quality rating system with an elaborate system of tax credits, mostly for providers, instead of scholarships to families. He said the Minnesota model is better because the scholarships are more lucrative. If successful, he said, it "would be the envy of every state in the country."

Florida provides all parents - not just the poor - with a $2,500 voucher to spend on preschools that choose to participate in a state rating system. Providers that consistently rate among the state's worst can be disqualified from the program.

Steven Barnett, of Rutgers University's National Institute for Early Education Research, generally liked the approach but questioned how the program would work in areas so rural or so poor that they had only one preschool.

Rep. Mary Franson, R-Alexandria, the only licensed childcare provider in the Legislature, worried about a stigma for at-home daycares that don't participate in Parent Aware. If they do participate, she wondered if they would be forced to change.

"Would I still have the free rein to read from the Bible, or would we have to follow a rigid curriculum?" she said.

Rolnick said there's nothing in the Parent Aware program that would prohibit faith-based preschools, but it's not clear that taxpayer-funded scholarships could be used in them. As for lack of choice, Rolnick said the same concern was raised when the program launched in St. Paul's Frogtown neighborhood, a poorer section of town.

Putting millions of dollars in the hands of parents there prompted preschools to expand and new ones to open, he said, including the New Horizon preschool that Madelyn attends.

Chad Dunkley, chief operating officer of New Horizon Companies, said his company would have "absolutely not" rebuilt an old industrial building in the neighborhood were it not for the scholarships. The company typically builds in the suburbs.

He said he hopes the state will step in once the scholarship program ends at the end of the year. If not, "we are going to have a lot of families facing some tough choices."

The program has also encouraged existing preschools to improve, said Jean Lang, who has run her Treasures of the Heart business from her St. Paul home for 20 years. "Parent Aware just made me want to do a better job," she said. She got three stars in its rating system at first, then immediately made changes to get four.

The Minnesota Early Learning Foundation was created by the Legislature in 2005 to find out the most efficient way to spend about $400 million in state and federal money on early childhood education, said Duane Benson, executive director of the foundation and a former Republican state senator. Five years and $20 million in private money testing various approaches led it to settle on the preschool ratings and scholarships.

Dayton has asked the Legislature for $2 million to maintain and slightly expand Parent Aware. Barbara Yates, an acting assistant commissioner in the Education Department, said the administration would like to spend even more to take the program statewide, but that's not going to happen when the state is facing a $5 billion budget deficit.

A bill introduced by Sen. Geoff Michel, R-Edina, is more ambitious. It would redirect about $35.5 million in existing state and federal education money over two years to create state preschool scholarships for poor families and expand the Parent Aware to preschools nearly statewide. Michel said most policymakers are convinced there's a "magic moment" in brain development from ages 3 to 5.

Heather Hill said she sees the benefit in her 4-year-old son Charlie, a classmate of Madelynn's. Hill got a scholarship to pay Charlie's $11,800 annual tuition when her husband, a union carpenter, was out of work. She credits the preschool with helping Charlie make what she calls amazing progress in writing and getting along with other children.

"We are very, very grateful," she said. "We would not be able to put Charlie through here. I don't know how people would be able to afford it without a scholarship. There is no work anywhere because of the economy."

(Copyright 2011 by The Associated Press. All Rights Reserved.)

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