Major child care companies funded by private equity in three states had higher rates of complaints and high-risk violations than other child care centers, a Democratic congressional investigation found.
Sen. Jeff Merkley (Oregon), the top Democrat on the Senate Budget Committee, requested information in March from the two largest for-profit child care providers, KinderCare Learning Companies and Learning Care Group, which are both backed by private equity companies.
Democratic staff on the committee reviewed records for child care centers in California, Texas and Virginia over the past five years. California and Texas have more KinderCare and Learning Care Group centers than any other state and all three states produce detailed inspection records.
KinderCare and Learning Care Group yielded approximately twice as many complaints as other for-profit chains and almost three times the complaints of all other child care facilities across the three states, according to the report. Private equity-backed centers broadly had a similar rate of complaints to other for-profit chains but had almost twice the complaints as all other child care centers.
Congressional investigations are not intended to prove criminal guilt or civil liability, but they do inform potential policymaking.
When presented the findings, both companies told The Washington Post they are committed to keeping children safe.
“Nothing is more important than the safety and well-being of the children in our care, and we take seriously our responsibility to earn families’ trust every day,” said KinderCare spokesman Ryan James, adding that the company requires rigorous incident reporting and welcomes the oversight that comes with public subsidy programs and quality rating systems.
Learning Care Group responded “extensively” to the Budget Committee with details on safety, investments, staffing and financial operations, said Marielena Santana, a Learning Care spokeswoman.
“We also recognize that the work of keeping children safe is never finished. When concerns arise, we take them seriously, work directly with regulators, and remain committed to addressing issues and continuously improving,” she said. “We stand behind the information we have provided and welcome a fact-based discussion about how we can continue strengthening early-childhood education.”
Advocates for private equity-backed funding of child care argue that existing federal programs don’t adequately support most families’ child care needs, and that private equity can provide needed resources to make child care available in a challenging industry. Critics argue that the model incentivizes companies to maximize profits by reducing staff and boosting prices.
The report also found the two chains showed greater rates of “high-risk” citations, which mark when the risk of harm to children is the highest. In Texas, that kind of risk might include child neglect, unsafe sleep practices or certain failures to background check staff; or in Virginia, exposure to a life-threatening allergen, drugs or strangulation hazards.
The chains’ high-risk citation rate was approximately twice as high as other for-profit centers and other child care centers. Private equity-backed centers had more high-risk citations than other types of child care providers in California and Virginia, but a similar rate to other types of child care centers in Texas.
In Texas and Virginia, KinderCare and Learning Care Group child care centers also had higher rates of supervision-related citations than statewide averages.
“I think it’s important for people to understand how when private equity buys up enterprises, they have a strategy. I wanted to know if that strategy meant lower costs and better service or higher costs and more degraded service,” Merkley said in an interview.
The findings, he said, show “a degradation of service for sure.”
The companies did not provide most of the information Merkley requested despite benefiting from publicly-funded subsidies, according to the report. The committee instead based the analysis on financial statements, securities filings and licensing records from the three states.
KinderCare and Learning Care Group both emphasized their commitment and improvements to safety standards, in statements to The Post.
“This commitment often translates to higher incidents because we are more transparent in our reporting to state and local licensing agencies than other providers. We do this voluntarily because it is what’s best for children,” he added. “We share Senator Merkley’s commitment to child care safety and accountability. However, the report does not establish a connection between ownership structure and higher safety citation rates, a limitation its own methodology acknowledges.”
Learning Care has implemented “comprehensive safety protocols” in their classrooms, has infant staffing ratios that exceed many states’ requirements, and have around four times the industry average of nationally accredited schools, Santana said.
In January, congressional Democrats will take control of both chambers of Congress and committees with broad investigative powers, including the power to issue legally-binding subpoenas.
Merkley said he plans to continue to investigate the role of private equity in child care next year, when he might chair the Budget Committee.
“There’s a lot of areas that require oversight, but understand that our top effort has to be to deliver on the three things that we campaigned on,” he said. “One is cost, so that very much ties into accountability for child care” as well as food, health care, housing and education.
The cost of child care routinely ranks as one of the biggest concerns for Americans worried about the cost of living, and exceeded the cost of rent and medical services in September, according to an October analysis by Bank of America.
Private equity has made investments in eight of the nation’s 10 largest for-profit child care organizations, according to a 2024 report from the nonpartisan congressional Research Service.
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