Private Equity in Michigan Childcare and K-12 Education

Private equity firms control at least 160 childcare centers in Michigan, receive millions of dollars through K-12 outsourcing contracts, and are positioned to benefit from new education funding streams.

A new report from the Private Equity Stakeholder Project examines private equity’s growing role across Michigan’s education system, including childcare, K-12 outsourcing, and voucher-related programs.

Michigan public school enrollment has declined by nearly 100,000 students since the 2018-19 school year, and several districts have announced school closures or consolidations. At the same time, investor-backed companies continue to receive contracts for services that schools rely on, including special education staffing, transportation, food service, and healthcare.

Key findings

• Private equity firms control at least 160 childcare centers in Michigan. Learning Care Group, owned by American Securities, operates 70 locations in the state, while KinderCare, owned by Partners Group, operates 51.
• Detroit Public Schools Community District is set to spend more than $22.5 million during the 2025-26 school year on four private equity- and venture capital-backed special education staffing companies.
• Private equity-backed contractors have faced legal and governance concerns. Stepping Stones agreed to a $4.25 million settlement in 2024 over allegations of widespread wage and hour violations, while denying the claims. Soliant and its subsidiaries have also faced litigation and a data breach affecting more than 13,000 people.
• The new federal school voucher tax credit could create additional business opportunities for investor-backed education companies. Eligible expenses include transportation, services for children with disabilities, and before- and after-school programs. The report identifies companies such as First Student and KinderCare that already operate in Michigan and could benefit.

Why it matters

PESP’s previous education research has found that outsourcing can cost districts more than providing services in-house while contributing to higher turnover and reduced accountability. In Richmond, California, PESP estimated that the district could have saved $6 million by bringing positions outsourced to private equity-backed special education staffing companies back in-house. Many of the same companies operate in Michigan school districts.

The Michigan report builds on PESP’s broader research into private equity’s role in public education, including K-12 outsourcing, special education staffing, childcare, and education technology.

Download the full report: