Opinion: A Rapid Succession of Child Care Closures Calls for Close Scrutiny

Yahoo

05-03-2025

The closure of a child care program can be devastating to children, families and the early educators who staff them. When a number of programs owned and operated by the same company — often referred to as a child care chain — start closing in rapid succession, it becomes cause for alarm and deserves attention. That's what's happening with Guidepost Montessori, as multiple sites around the country are closing. This episode, which is one of the first illustrations in the U.S. of what can happen when a for-profit child care chain goes sideways, calls for close scrutiny.
Guidepost Montessori is a network of more than 130 Montessori-inspired child care programs and schools serving children ages birth to 18, with most programs focusing on children under 6 years old, according to its website. Most sites are located in the U.S., with some abroad. The network is owned and operated by Higher Ground Education, an education management company that is backed by tens of millions of dollars in venture capital funding. Higher Ground Education pursues what one of its funders refers to as a 'hyper-scaling' approach, and founder and CEO Ray Girn (who recently resigned) once drew an explicit analogy to Airbnb, telling EdSurge in 2020, 'I think that there is an opportunity to achieve [with Guidepost] what ride-sharing apps or Airbnb have achieved: show the world another way of doing education at a sufficient scale.'
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Yet just since the beginning of 2025, at least 16 closures have been reported by local news outlets: Guidepost has announced closures of all five active sites in Colorado (and paused a sixth site that was slated to open) as well as three sites in Ohio, two in Iowa, two in Minnesota, and sites in Missouri, Oklahoma, Virginia, and Wisconsin. These closures follow others that occurred abruptly last year in Virginia and in Oregon (the latter allegedly as a response to staff unionization attempts). Importantly, these are just the known closures that have been publicly reported in the news. In a Feb. 28 post on the Higher Ground Education Substack, where the company shares weekly memos, new co-CEO Maris Mendes acknowledged that the company is 'in the midst of closing nearly 1/3 of the school communities that have so lovingly been built over the past 9 years.'
According to Mendes, the driving force behind the closures is the same hyper-scaling strategy Higher Ground's investors saw as a selling point; she writes that, 'In our eagerness to meet the vast vision of our mission, we overextended ourselves, growing our school network beyond what we could effectively support, both financially and operationally.' Specifically, the company is struggling to pay rent to landlords. Last year, two Guidepost Montessori sites in Northern Virginia closed after reportedly missing multiple rent payments, spurring the landlords to change the locks. In December 2024, Guidepost lost a civil judgment in Missouri for nearly $240,000 in non-payment of rent and 'unlawful detainer' of the premises by Guidepost.
Similarly, in a letter to Denver ABC 7 about the Colorado closures, Guidepost asserted that 'Our organization struggled to raise the capital necessary to support our schools, the majority of which were still recovering [from the pandemic], and suffering major losses. At many schools, we were running losses of $50,000+ per month that our creditors were no longer willing to subsidize, and we've had to figure out how to manage. In some cases, our landlords have been able to help us navigate these difficulties. They have generously provided rent relief, or renegotiated lease terms, in order to help an individual school to overcome its challenges and reach a point of financial sustainability. In other cases, that hasn't been possible.'
The pandemic point is an interesting one. The pandemic certainly threw many child care programs for a loop, but it's worth observing that Guidepost raised $70 million in equity through two funding rounds in January and April of 2021 and continued to open new sites at a rapid clip, suggesting an aggressive strategy despite the pandemic rather than one hobbled by it.
The trouble Guidepost finds itself in is reminiscent of other child care chain collapses or near-collapses outside of the U.S. As I wrote last year, large chains like Australia's ABC Learning and the Netherlands' Estro Group previously saw rapid and widespread closures due to financial mismanagement or overly aggressive growth.
While much more remains to be investigated, Guidepost may be on the path toward becoming one of America's most significant child care collapses. It's unclear what the outcome will be for the network, but it's certainly worth asking questions about how and why this happened, whether there are any problematic trends that reach beyond Guidepost and pose risks for other chains, and what can be done to stop a company relied on by so many families and educators from getting in this type of mess in the first place.