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Recent surveys conducted by the Pre-K for PA and Start Strong PA campaigns and the Pennsylvania Office of Childhood Development and Early Learning (OCDEL) of early childhood providers found widespread, devastating impacts resulting from the state’s budget impasse.

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The surveys found that 95 Pre-K Counts and Head Start Supplemental Assistance Program providers in 32 counties have collectively taken on nearly $20 million in loans to continue serving working families while state funding has been frozen.

Many of the loans were business lines of credit taken out at an average interest rate of 7.5%, while others have been personal loans with higher interest rates. Many providers indicated that loans will only sustain operations for a short period of time and the accumulated interest liability may have severe consequences for future operations. 

“This survey represents just a small portion of early learning providers, but it is clear that the continued state budget impasse is further destabilizing a sector that was already in the midst of a crisis with financial and staffing challenges,” said Kara McFalls, executive director of the Pennsylvania Head Start Association. “Early learning providers cannot withstand additional insecurity.”

While numerous providers have taken on debt to keep classrooms open, others have been forced to take more dramatic measures, such as layoffs and closing classrooms completely.

Through outreach across 21 grantees operating Pre-K Counts or Head Start programs in 16 state counties, OCDEL documented closures, planned closures, or delayed openings of classrooms that affect more than 4,000 slots in Pennsylvania. As a result, working families across the state are struggling to arrange and pay for alternate care for their children during working hours. Both Pre-K Counts and Head Start are free programs for qualifying families.

“Shutting our youngest learners out of classrooms will certainly have negative impacts on school readiness for this cohort of three- and four-year-olds in years to come,” said Robert S. Carl, Jr., president of the Schuylkill Chamber of Commerce. “It’s time to compromise and pass a budget that invests in the early learning workforce.”

Previous surveys have documented thousands of unfilled early learning teaching positions due to low pay. Providers fear that closures and layoffs resulting from the state budget impasse will exacerbate these staffing challenges and further destabilize programs.

Polling from March 2025 shows that Pennsylvania voters overwhelmingly support increased state funding for early learning programs – including 83% support to allocate state funding to increase child care worker wages, 73% support to increase funding to serve more eligible children in pre-k programs, 73% support to increase funding to help more low-income families afford high-quality child care, and 72% to allocate funding to increase compensation for pre-k teachers.

Pre-K for PA and Start Strong PA urge state lawmakers to pass a final budget that includes:

• A $55 million investment in a new and recurring Child Care Recruitment and Retention line item to grant licensed child care providers participating in the child care subsidy program with $1,000 per educator
• $17 million in additional funding for Pre-K Counts
• $9.5 million for the Head Start Supplemental Assistance Program
• A $16.2 million increase for infant/toddler Early Intervention and a $38.1 million increase for preschool Early Intervention