Aspiring early childhood educators who want to pursue undergraduate degrees next year might lose out on federal loans they need to afford their studies. That’s because, ironically, the profession does not seem to pay many of its workers enough to meet new loan standards set by the Trump administration.
“If I had to pay for a class right now out of pocket, I wouldn’t take it,” said Shay Bourrage.
For 13 years, Bourrage has nurtured toddlers and infants as young as 6 weeks old so their caregivers could work or attend classes. She became a teacher at a child care facility in southern Illinois, but needed a bachelor’s degree to advance her career.
President Donald Trump’s tax and spending megabill slashes funding for higher education, including student financial aid. Under the “One Big Beautiful Bill Act,” degree programs will lose eligibility to participate in the Federal Direct Loan Program if they are determined to have “low earning outcomes” for undergraduates and graduates, starting in July 2026.
Bourrage completed her degree last year as part of a fully funded online program through Illinois State University. But it wasn’t easy. And in some ways, her income after completing school illustrates the Trump administration’s point.
A mother to five children of her own, Bourrage said she now earns about $40,000 each year, a salary that leaves her struggling to afford rent, groceries and other essentials. This month alone, her electricity bill was $500. She loves to teach, but she does not know how long she can afford to continue doing it.
“The pay needs to be where we can live and be OK and not have to worry about how we’re taking care of our own children while we’re taking care of other people’s children,” Bourrage said.
The new federal loan rule says that if the median earnings of a program’s degree recipients remain below the earnings of a high school graduate for two out of the last three years before the education secretary makes a determination, students enrolled in that program would no longer be able to pay for it with federal loans.
According to the most recent data from the College Board, the average estimated total cost of a four-year undergraduate degree earned at a public in-state college while attending classes full-time and on-campus is nearly $30,000. In Illinois, someone with an undergraduate degree in early childhood education likely brings in $32,860 each year, according to analysis of federal data by the Early Learning Policy Group. However, a high school graduate in the same state can expect to earn $40,285 in median wages each year.
The White House said these new measures force colleges and universities to have “skin in the game” and reduce the risk of bloated student loan balances and the need for taxpayers to bail out loan recipients.
But shutting off federal loans for these students could turn people away from the profession altogether, at a time when teachers are burnt out and leaving classrooms and daycares, Bourrage said.
“We know how important those first five years of life are – the importance of the environment that these children are in,” said Amanda Quesenberry, an associate professor in the School of Teaching and Learning at Illinois State University. “But many people have thought, and still do, ‘Oh, you’re just hanging out with kids. Why would we pay you more? You’re babysitters.’ We’re so much more than that.”
While low wages are a significant threat to the stability of the profession, experts are worried this move will simply worsen a growing child care crisis rather than change the economics of the industry for the better.
Early childhood educators suffer low pay, staffing shortages
Nationwide, about 2.2 million adults provide care for nearly 10 million children age 5 or younger.
Research suggests that high-quality early childhood education benefits the brain development of infants and young children, said Grace Reef, who directs the Early Learning Policy Group. Educators who are trained in play-centered learning and early developmental stages are better equipped to nurture children more safely and effectively, she added.
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Yet early education workers earn far less than elementary or middle school teachers, with a national median wage of $13.07 per hour, according to the Center for the Study of Child Care Employment at the University of California, Berkeley. In some states, especially in rural areas, the pay is far lower. In 2022, Louisiana and Wyoming had the lowest median wages for early childhood educators in the nation, at $10.60 per hour.
Those low wages, combined with stress on the job, contribute to high turnover rates in child care facilities and preschools.
After the COVID pandemic shook the industry and prompted a “huge dropoff” in care providers, the workforce in recent months has finally returned to what it was in February 2020, said Abby Copeman Petig, who is the center’s research director. “But it’s still not enough.”
Surveys conducted by the National Association for the Education of Young Children have found that more than half of care administrators wish they could enroll more children in their programs, but high costs for parents or low compensation for qualified staff are barriers.
The economic model for child care is broken, said Reef, who has for years advised states, communities and colleges on ways to support child care workers who want to pursue higher education. Roughly 70% to 80% of a typical child care center’s budget covers wages, she said, with the remaining going toward rent.
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To boost pay that recognizes the value early childhood educators offer developing minds, Reef said communities and caregivers have two options: “If you want to increase pay, you either increase the price for parents, or you work in a state with a wage supplement to boost wages.”
For example, Louisiana, Nebraska and Colorado have offered refundable tax credits to people who work in child care. In Maine and Minnesota, child care workers can receive monthly grant supplements. But as states are forced to grapple with federal cuts and balance their own budgets in the months ahead, Reef said the competition for dollars that could have supported workers will grow even tighter.
Historically, the industry “has never been rewarded and recognized adequately for the work that it does and for the value it provides to communities,” said Daniel Hains from the National Association for the Education of Young Children.
These economic realities have helped create a crisis at all levels of education, Quesenberry said, adding that it’s “crazy” that someone could finish a four-year degree owing significant debt “and only have a job that pays them $30,000 a year.”
How will the new rule affect child care in the U.S.?
It’s already difficult to persuade workers to seek degrees in early childhood education to offer more developmentally appropriate instruction for young kids, Reef said. If someone now can’t get a student loan for the degree, she wonders what that will say to prospective students.
“I feel like it’s the wrong step at the wrong time,” Reef said.
On July 3, the day before Trump signed the bill into law, the National Association of Student Financial Aid Administrators pushed back on the proposal to place more restrictions on access to federal student loans and other financial aid. Trump’s law seeks “to adhere to an arbitrary deadline with policy that could limit opportunity and access for low-income students seeking to pursue post-secondary education,” Melanie Storey, president and CEO of the organization, said in a written statement.
“Investing in financial aid is investing in the potential of every student to shape a better future for themselves and their communities,” Storey said.
Reef predicted that potential workers may be discouraged from pursuing early childhood education degrees either because they can’t afford it, or institutions will close their programs if they are unable to pass the OBBBA’s low-earnings threshold.
“It’ll be harder and harder to attract people to work in child care,” she said.
Right now, Hains said, the industry is waiting to hear from the Department of Education about how to interpret this part of the law and what regulations need to be in place to make it enforceable. The department held an Aug. 7 public hearing to discuss changes to federal student loan programs, as well as how institutions are being held accountable. Written comments and recommendations can be submitted until Aug. 25.
Bourrage is not holding back when people express interest in entering her field. When her 11-year-old daughter said she wanted to become a teacher, Bourrage said her reaction was swift: “Girl, no, you don’t.”
She did not feel good discouraging her child from joining her profession. But what future does she have, Bourrage wondered. So many of her colleagues say they are burnt out, do not earn enough money or are going back to school to learn a new skill. Many of them work second jobs, she said, “because they can not live off of how much they make.”
If access to financial aid, including federal student loans, is jeopardized and if early childhood education programs are cut, Bourrage worries about the long-term effects on communities and the country.
Hains said the most vulnerable people in society have the most to lose if the policies go into effect as written.
“The impact is going to affect young children and their families the most,” he said.