🛝 Public Schools Close, AI Debates Intensify, New Mexico Goes All-In on Free Child Care

Welcome to Playground Post, a bi-weekly newsletter that keeps education innovators ahead of what's next.

This week's reality check: Districts are closing schools because they can't afford to operate with fewer students, while a researcher warns that free AI tools from tech companies are actually a customer acquisition strategy. Meanwhile, one state just made a $600 million bet on universal child care.

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💎 Data Gem

50% of teachers have now received at least one AI professional development session - tripling from just 13% in 2023 and up 8 points from 42% in October 2024, according to EdWeek's latest survey.

Why Public Schools Are Closing Across the Country

Districts nationwide are facing a crisis: the birth rate has fallen more than 20% since 2007, and housing affordability is keeping young families out of urban areas.

The result? 

Schools that once held 70,000 students now have 50,000. And because funding is based on per-pupil enrollment, the math doesn't work anymore.

What makes this particularly brutal is the scale needed to operate. 

As little as 5-10 fewer students can eliminate $50,000-$100,000 from a school's budget - enough to cut classroom aides, nurses, or art teachers.

Federal pandemic funding delayed the reckoning, but that money is gone now. And the Trump administration's new federal private school choice program adds another layer of complexity to enrollment projections.

For education innovators, declining enrollment means districts will prioritize solutions that help them operate more efficiently with fewer resources. Tools that reduce administrative overhead, enable multi-age learning, or help consolidate services across schools could find eager buyers as districts try to do more with less.

Free AI Tools Are Customer Acquisition?

Half of U.S. students now use AI for school, up 15 percentage points in just two years. OpenAI just announced it’s giving roughly 400,000 K-12 educators free access to ChatGPT through next academic year.

Sounds great, right? 

Not according to Justin Reich, director of MIT's Teaching Systems Lab.

Reich draws a parallel to the Scantron machine from the mid-20th century. Technologists promised it would save teachers time and improve assessment. Instead, it just led to more multiple-choice tests.

His bigger concern? 

Tech companies are using schools for brand building. "School district leaders should constantly remember that, for organizations like OpenAI, giving away ChatGPT is a customer acquisition strategy," Reich told PBS NewsHour.

He warns that the free tools are "venture capital-subsidized" - like those early Uber rides. When investors want their money back, the experience could get worse through pricing, ads, or sponsored content.

Parents and teachers remain split. A RAND survey found 61% of parents believe AI will harm critical thinking, compared to just 22% of district leaders.

The market signal is clear: educators want AI tools that enhance learning without creating dependency on specific vendors. Companies that can prove their tools improve outcomes independently - and aren't just customer acquisition plays - will have a competitive advantage as skepticism around free products grows.

New Mexico Launches Universal Free Child Care for All Families

New Mexico just became the first state to guarantee free child care regardless of income, starting at six weeks of age.

The program saves families roughly $16,000 per year on full-time daycare. It's funded largely by oil and gas revenues and will cost $600 million annually once fully implemented.

Before the expansion, only 32 child care slots existed for every 100 children under age two. The state expects enrollment to double from 32,000 to 64,000 children by fiscal 2028.

To meet demand, New Mexico needs 5,000 more workers. The plan includes recruitment, training, higher pay for extended-hour centers, and support for 1,000 people to operate home-based daycares in rural areas.

Some providers worry they'll lose money if state reimbursement rates don't match what they currently charge. Others are concerned the universal program will crowd out lower-income families who need care most.

The state is betting the program will attract families and businesses to one of the nation's poorest states. The number of children under 5 fell 11.3% from 2019 to 2024, while residents over 75 increased 19%.

For innovators, New Mexico's experiment highlights massive gaps in early childhood infrastructure - particularly for infant/toddler care, full-day options, and nontraditional hours. Solutions that help states scale capacity quickly, recruit and train workers efficiently, or enable home-based care in rural areas could see demand beyond just New Mexico as other states watch this model.

⚡️More Quick Hits

This week in education:

• OpenAI's free teacher workspace  -  FERPA-compliant ChatGPT for 150,000 educators across 16 districts through June 2027, includes GPT-5.1 access and Google Drive integration

• Flint raises $15M Series A  -  AI co-teacher platform plans to expand from hundreds of schools to millions of students while investing in teacher training and AI literacy

• UC San Diego math skills crisis  -  1 in 8 incoming freshmen have below middle-school math skills, up from 0.5% in 2020, revealing catastrophic grade inflation

• IDEA turns 50  -  Retrospective on innovations catalyzed by special education law, including universal design for learning and teletherapy models that now serve all students

📚 Weekend Reads

Monthly roundup of resources you might like:

• Academic Recovery Still Elusive — Data showing students need 4.8 additional months in reading and 4.3 months in math to reach pre-pandemic levels.

• Current Term Enrollment Estimates — Spring 2025 undergraduate enrollment up 3.5% to 15.3 million students, with community colleges leading the resurgence at 5.4% growth

• Educator Pay Rankings 2024-25 — State-by-state analysis showing average teacher salary reached $74,177, yet inflation has teachers earning 5% less than a decade ago

• Public Confidence in Schools — Record-low public approval with only 13% giving schools an A or B grade, and 59% of parents preferring private school options with public funds

To stay up-to-date on all things education innovation, visit us at playgroundpost.com.