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K-12Lead of the Week

Head Start - An Opportunity for For-Profits Too

From the November 19 issue of K-12Leads And Youth Service Markets Report.

Announcement: Competitive Head Start Prekindergarten Expansion Due January 15 (Nov 7), Oregon Department of Education

Their Description:
The 74th Oregon Legislative Assembly appropriated 39 million dollars to increase the numbers of eligible children served through Oregon Head Start Prekindergarten program. Funding for over 1700 child slots was awarded to current Oregon grantees in the first year of the biennium. The Oregon Department of Education will... award approximately 11 million additional dollars for adding child slots in the second year of the biennium....

Children in families living at or below 100% of the federal poverty guidelines are eligible..... OHSPreK... is designed to meet each child’s individual needs through instructional planning that includes language, literacy, math, science, social/emotional and physical skills. OHSPreK emphasizes the importance of strengthening family efforts and working with community resources to identify and address children’s health (medical, dental, emotional) and developmental needs. The program also supports parents as early teachers of their children... and helps set them on a path of parent involvement in the educational process....

OHSPreK funding is adequate for operation of a program that serves children in Part-Day (3.5 to 6 hours) classes which meet for part of the year (21 weeks in the first year, 32 weeks of service in succeeding years.)....

The Department will.... [E]nsure an open and competitive (emphasis added by K-12Leads) expansion application process.... [A]ward funds based on applicants clearly demonstrating the ability to meet required Performance Standards..... [D]istribute funds according to documented percentage of unmet needs for identified areas of the state. ...

This expansion opportunity is open to non-sectarian organizations. Applications from a variety of potential providers will be accepted including but not limited to: Oregon Head Start Prekindergarten grantees, public schools, tribal governments, community based organizations (child care, preschools, community action agencies, etc), institutions for higher education.... A combined program total of 120 or more child slots is considered the critical mass needed to support comprehensive services.

May local programs charge fees for service? (Federal) Head Start Performance Standard 1305.9... prevents programs from prescribing any fee schedule... In some cases, programs choose to serve Head Start children in classrooms along with non-Head Start eligible children. Other funding sources, including private pay, may be used for these non-Head Start children....

My Thoughts: At some $6.8 billion in FY 2007 appropriations, the Department of Health and Human Services’ Head Start program is the second largest federal funding stream in school improvement.

If what counts here is capacity rather than tax status, for-profit providers should be competitive in Oregon. Section 641(a) of the new “Improving Head Start Act of 2007,” awaiting the President’s signature, opens the program to “any local public or private nonprofit agency... or for-profit agency, within a community.”

The November 13 issue of my firm's School Improvement Industry Week noted an American Enterprise Institute study suggesting the feds figures an average annual expenditure of around $7000 per child under the program. Some portion is administration, but the remainder is bound to be substantial. For example, at $6000 per pupil, 32 weeks works out to over $185 per week; 21 weeks, $285. Nationally, private day care runs from $100-400 per week depending on locale, provider and services.

Providers can mix fee-paying and Head Start students, which should be good for both the students and centers with excess capacity. The door has opened for quality for-profits. It’s time to walk through. ••••

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