🛝 What the System Can't See

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

This week's reality check: States spent $10.6 billion last year on programs that fund private schools. Seven in 10 college CFOs say their institution has too many academic programs. And while young workers get shut out of entry-level jobs, economists are projecting the largest worker shortage in American history.

Data Gem

New York issued about $237 million in Summer EBT food benefits to families last year. $62 million of it went unspent, roughly 26% of everything distributed, before the 122-day deadline expired, according to Chalkbeat.

$10.6 Billion Is Flowing to Private Schools

The newest American private schools are opening in barns, co-working spaces, church Sunday school rooms, and, in one West Virginia case, a family fun center next to the go-kart track.

A ProPublica analysis of 13 states found at least 1,500 more private schools than existed five years ago, bringing the total in those states past 9,600.

The growth runs on public money.

About 30 states now let families spend tax dollars on private school tuition, and more than 1.5 million students do. 

Last year, states allocated $10.6 billion to these programs, a 29% jump in a single year.

In Iowa, public funds subsidized 99% of all private school students this past year. Florida has averaged 100 new private schools annually for five years. Arkansas added about 120 in three.

Then comes the part every operator and investor should sit with.

Some of the states writing the checks cannot say how many private schools they have, or where. Arizona's education department told ProPublica that state law bars it from any role overseeing private schools. 

The federal government keeps no comprehensive count either.

The states are writing the checks. They can't see who's cashing them.

Once schools open and start accepting funds, few states regulate what's taught, who's qualified to teach it, or how the money is spent. 

West Virginia's public education codebook runs more than 1,300 pages. "It's thicker than two Sears catalogs," said Paul Hardesty, president of the state Board of Education. 

The rules for home school and private school, he said, "will fit on an index card."

Even minimal guardrails aren't passing. 

West Virginia legislators proposed requiring participating schools to give a common standardized test and report the results. The proposal died.

And the market is still accelerating. Eighteen states now open their programs to every student regardless of income, and the first federal tax credit for K-12 private education, which we covered in June, starts moving money in January.

For education innovators, a $10.6 billion market with no infrastructure layer is the gap itself. Parent due-diligence platforms that surface founder credentials, safety records, and outcomes no state currently collects. Voluntary accreditation and outcomes-reporting tools that let serious operators prove quality, because in a market where the state provides no signal, proof becomes the differentiator. The money mapped the market in three years. Nobody has mapped the schools.

Colleges Are Cutting Programs They Can't See

College CFOs are feeling better. In Inside Higher Ed's annual survey of 213 chief business officers, 62% expect their institution to be better off financially a year from now, a jump of nearly 20 points from last year.

Then the same survey asked what has to change.

Seven in 10 say their institution has too many academic programs for its current enrollment, up from 59% in 2025. CBOs named academics the biggest source of cost-revenue misalignment, ahead of athletics and tuition discounting.

Here's the problem with cutting.

Just 13% say their institution understands per-student program costs "very well."

They know they have to cut. They can't see where.

The blindness is structural. A 31% plurality of institutions still budget year to year, with no multiyear projections. 

"They're not doing five-year projections, so they don't actually understand what is about to happen in the marketplace," said consultant Rebeka Mazzone, who called some of the optimism "way too confident."

The market data backs her up. S&P Global Ratings found enrollment grew in fiscal 2025, up 2.1% at the public colleges it rates and 0.7% at privates.

Operating margins got worse anyway.

The median margin across 286 rated private institutions was negative 0.4%, the third straight negative year. Since June 2025, S&P has downgraded private colleges 21 times and upgraded three.

Growth isn't fixing the problem, and cutting requires visibility most institutions don't have. 

Only 9% have undergone major restructuring in the past two years.

42% of CBOs think it's likely their institution will share administrative functions with another college within five years. 56% say it should.

For education innovators, the sector just published its own product roadmap. Activity-based costing tools that make per-student program costs legible before the cut list gets drawn. Multiyear scenario modeling that moves the 31% off single-year budgets. And shared-services platforms for the gap between the 42% who expect to collaborate and the 56% who know they need to.

Young Workers Can't Get In. The Economy Is About to Run Out of Them

The fear defining the youth job market is AI. Graduates booed commencement speakers who hyped it, and Meta cited it while laying off more than 8,000 workers.

The Federal Reserve Bank of St. Louis measured what's actually happening.

Between April 2023 and December 2025, the employment rate for workers 18 to 24 fell by more than 2 percentage points. 

For workers 25 to 64, it barely moved.

Young people aren't giving up. The decline showed up as unemployment, not labor force exits, meaning they're still searching in what the researchers call a low-hire, low-fire economy: companies keep who they have and stop opening doors.

AI plays a role, but a specific one. 

The researchers found it is raising the bar for first jobs, with roughly one-third of the rise in youth unemployment tied to growing demand for AI-related skills in job postings. 

Not automation. A higher bar.

Then comes the twist.

Economists say the real crisis is the opposite of too few jobs. The US is heading into the largest worker shortage in its history, Hechinger reports.

Between 2024 and 2032, more than 18 million college-educated workers will leave the labor force while fewer than 14 million enter it, per Georgetown's Center on Education and the Workforce. 

That leaves a gap of 4.6 million workers. Lightcast puts it at 6 million.

The projected shortfalls include 611,000 teachers, 362,000 nurses, and 210,000 engineers. 

In semiconductor production, "the unemployment rate is probably negative 20 percent," said recruiter Matt Walsh. "There just aren't enough people."

Pennsylvania alone projects a shortage of 218,000 credentialed workers a year by 2032.

For education innovators, the gap between the two findings is the market. Pathway tools that map majors to the shortage lists before students enroll, since the projections are public and the routing isn't. And entry-level AI-skills credentials that clear the specific bar the St. Louis Fed identified. The shortage is already priced in. The pipeline isn't.

⚡️More Quick Hits

This week in education:

• States are suing over $1 billion in canceled school mental-health grants — the funding has supported hiring 1,300 mental-health professionals serving 775,000 K-12 students, with grant terminations possible starting July 31

• Mississippi paid $573,000 for a system that made teachers' $748 harder to spend — the state's new digital wallet for classroom-supply funds lists more than 160 vendors but approved only five Mississippi-based ones for reimbursement, and teachers must complete a training session before buying

• International students now face a 4-year cap on their stays, starting September 15 — the finalized DHS rule drew nearly 22,000 public comments, and nearly all PhD programs and the average bachelor's pathway take longer than four years

• California is 6,000 bilingual teachers short of its 2030 goal — the state committed $10 million to recruiting high schoolers into the pipeline, while credential costs of $1,500 to $4,000 keep pushing districts onto emergency permits

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