The June 2025 Chapter 11 filing by Higher Ground Education was widely covered as a Montessori story. It is also, more broadly, a child care story — and the pattern around it is older and larger than one company.
The 74's Mary Beth Gilkey wrote in late 2025 that a "rapid succession of child care closures calls for close scrutiny." Her reporting traced multiple venture-backed and private-equity-backed early-childhood networks experiencing the same trajectory: aggressive expansion fueled by outside capital, escalating rent and operating costs, inability to reach positive cash flow at scale, and ultimately, closures that left families and educators scrambling.
We have written separately about Higher Ground's bankruptcy. This post is about the pattern.
What the Pattern Looks Like
The financial mechanics tend to repeat:
- An operator raises a large institutional round on a thesis that child care is a fragmented market ripe for consolidation.
- The capital is deployed into rapid school openings in premium-priced urban and suburban markets, often via expensive long-term commercial leases.
- Tuition is set at a price point that excludes most working families because the unit economics require it.
- The model never reaches the enrollment density needed to cover central overhead, marketing acquisition costs, and the rent obligations stacked across dozens or hundreds of leased sites.
- Operating losses compound year over year, met by additional rounds of capital rather than a structural rethink.
- When the next round does not arrive, lenders foreclose on individual school properties in waves, the network shrinks, and the parent entity eventually files for bankruptcy.
This is not unique to Montessori-branded operators. Public reporting in trade press and outlets like Bloomberg Law and bankruptcy news services has documented similar arcs at other early-childhood and child care chains over the last several years.
Why It Keeps Happening
Three structural facts collide:
- Child care has very little fat. Quality early childhood education is labor-intensive by definition. The single largest cost is staffing, and staffing cannot be cut without harming children. The premium tuition model assumes families can pay an amount that approaches private-school rates from infancy. Most cannot.
- Commercial real estate is the wrong fit. Long, expensive leases assume a stable, scalable revenue base. When enrollment dips or local conditions shift, lease obligations remain — but tuition cannot easily flex.
- Investor return expectations are incompatible with the cost structure. Venture-backed and private-equity-backed operators must show a path to investor-scale returns. Child care, done well, does not produce those returns. The mismatch is structural, not operational.
When all three collide, closures follow. The cost is borne by the families who built routines and trust around a particular school, and by the educators whose jobs and wages vanish.
The Conversation We Are Not Having
While this venture-backed expansion was burning capital, public Montessori was being told it could not scale. Independent justice-centered Montessori schools — many serving Black, Brown, immigrant, and working-class families — were told their financial models were not "investable." Smaller community-rooted operators were starved for the same capital that flowed freely into the chains.
The 74 has reported separately that public Montessori outperforms other early ed programs. Indianapolis Public Schools' "Rebuilding Stronger" reorganization continues to expand Montessori programs without leaning on private equity capital. Monarch Montessori, a public charter in Denver, was unanimously approved to expand through middle school in early 2026.
The story the field needs is not that Montessori is failing. The story is that one specific theory of how to fund and scale Montessori has failed — and the alternatives that have always existed deserve attention, infrastructure, and capital that has been routed elsewhere.
What Comes Next
The question is not whether more closures are coming. They are. The question is what the field does in response.
- Families displaced by closures need real intake and continuity support, not just a press release from a corporate office.
- Educators displaced by closures need wage, benefits, and reemployment infrastructure — the kind of labor protection that does not exist by default when a network folds.
- Communities need to be told the truth about which operators in their area are healthy and which are running on fumes, before the closures arrive.
- Funders, foundations, and policymakers need to redirect support toward the public, charter, and community-rooted Montessori organizations that have been doing the work without venture timelines.
The Peace Rebellion is building a network for that conversation. If you are an educator, a family member, or an organizer with a closure story to share — or with a healthier model that deserves attention — reach out at info@thepeacerebellion.org.