By Carlos Avalos
Several San Bernardino County school districts offer preschool programs in which children with disabilities are welcomed into classroom settings that also accommodate three-year-old and four-year-old students with normal cognitive ability. These include Alta Loma School District’s CHAMPS program (“Creating Happy Achieving Motivated Prepared Students”), Upland Unified Step Up Preschool, and Etiwanda School District’s C.L.O.U.D.S. program (“Creating Learning Opportunities and Understanding Differences in Students”).
In these settings, an early childhood special education teacher co-teaches alongside a general early childhood instructor, integrating special needs students with average achievers in the same class. By contrast, Capistrano Unified School District (CUSD) uses a “peer model” approach that separates its publicly-funded special education inclusion classes from any tuition-based general preschool offering.
In the operation of its Creating Happy Achieving Motivated Prepared Students (CHAMPS) program, the Alta Loma Unified School District charges a monthly tuition to parents of general education children, who are cataloged as non-individualized education program students. As of the 2024-25 school year, Alta Loma advertises a flat $290 per month fee for CHAMPS 4 days a week, 3 hours per day. A one-time registration fee of $75 per family is also required; this is a common figure across the programs. These fees apply only to general-ed peer students; special education students, meaning those enrolled in an individualized education program, attend free as part of the services school districts are mandated to provide to preschool age children with learning disabilities residing within their jurisdictions.
Upland Unified School District’s Step Up inclusion preschool program follows a similar tuition model. General education students are charged roughly $300 per month in tuition, plus a one-time registration fee of approximately $75. This fee is billed monthly regardless of absences or holidays, with late payment penalties and eventual disenrollment if not paid. As with CHAMPS, only the general education students pay; those enrolled via an individualized education program do not incur fees.
Etiwanda Unified School District’s C.L.O.U.D.S. and Etiwanda’s inclusion preschool C.L.O.U.D.S. also require general education students to pay tuition. The standard rate has been $300 per month with a $75 registration fee. District policy explicitly states that “payment in advance of applicable, non-refundable fees” is required for general education students. No tuition is charged for preschoolers who have disabilities and qualify for special education – their attendance is free as part of the State of California’s “Free Appropriate Public Education” program, known by its acronym FAPE.
In Capistrano Unified School District’s peer model preschool program, no tuition is charged for typical students with normal cognitive skills who are selected to participate in special education preschool classrooms. Capistrano Unified School District treats these students as volunteers/participants in the public program rather than tuition-paying enrollees. Any separate preschool programs Capistrano Unified School District offers for general education outside of the special education inclusion setting are run independently, either as part of state preschool or fee-based enrichment programs, so that the inclusion class remains free for all students. This clear separation ensures that general-education students in Capistrano’s special education classrooms attend at no cost, unlike the other districts’ practices.
Each of the the San Bernardino County districts involved in these programs strictly enforces these tuition payments. For example, Etiwanda’s handbook notes that if payment is over 10 days late, the student will be dropped and replaced by someone on the waiting list. The messaging clarifies that the preschool is “not a daycare” but an educational program, despite families of general-education students being required to pay monthly tuition to keep their children enrolled.
Even though the San Bernardino County districts offering these preschool programs charge parents tuition for the enrollment of general education students in the classes, these inclusion preschools also draw on public education funds, creating a situation in which there are multiple funding streams for the same program, such as Special Education Funds, the Individuals with Disabilities Education Act, and state special education funds. The primary purpose of CHAMPS, Step Up, and CLOUDS is to serve preschoolers with disabilities in an inclusive setting. These programs are staffed with early childhood special education teachers and receive federal Individuals with Disabilities Education Act Part B preschool funding and state special education dollars. The districts provide related services through psychologists, speech-language pathologists, occupational therapists/physical therapists, all of which are funded by special education money. For instance, Etiwanda’s program has a full cadre of special education staff (therapists, specialists, aides) collaborating to serve the students, indicating significant special education funding is allocated.
In some cases, districts have leveraged state education funding, including money available through the Local Control Funding Formula (LCFF) and Americans with Disabilities Act funds disbursed by the State of California by counting certain preschoolers as transitional kindergarten (TK) students. Notably, Etiwanda introduced a “TK dual enrollment” option in 2023-24 whereby some four-year-old presschoolers were enrolled as transitional kindergarten students while attending the CLOUDS preschool class.
By doing this, the district can collect Local Control Funding Formula and Americans with Disabilities funding for those students since transitional kindergarten is part of the public K-12 system, even as the child participates in the preschool environment. An internal attendance system screenshot from the Etiwanda School Distrct, in particular pertaining to John L. Golden Elementary School, shows general education students listed in a combined “TK – Preschool” class, indicating the district was claiming them in the transitional kindergarted attendance for funding purposes.
By dual enrolling these preschoolers as transitional kindergarten, the district receives state average daily attendance funds for them in addition to any tuition charged. This practice effectively pulls Local Control Funding Formula dollars into the inclusion preschool program. Alta Loma and Upland have fewer transitional kindergarten-eligible preschoolers, but any 4-year-old preschooler who qualifies for transitional kindergarten could similarly be counted as due for Americans with Disability Act subsidization if the districts chose. Notably, Etiwanda’s written policy states that children eligible for transitional kindergen/kindergarten “may not enroll in preschool,” yet the dual-enrollment program created an exception that blurs that line.
Federal Title I Funds can be used by districts to fund preschool services in low-income communities. It’s unclear if Title I subsidizes any of these specific programs. If, for example, one of Upland’s Step Up Preschool classes is located at a Title I elementary school, the district could be using Title I dollars to support teaching assistants, pay for supplies, or additional preschool slots. Title I-funded educational services must be provided free of charge to participants. If Title I funds are supporting any portion of CHAMPS/Step Up/CLOUDS programs to expand access for economically disadvantaged children, then charging tuition on top of that would violate federal rules. Title I programs must supplement, not supplant, existing programs and districts cannot charge families for Title I services.
The districts do not appear to run a formal California State Preschool Program (CSPP) in these inclusion classes. California State Preschool Program classes have income eligibility criteria and are free to qualifying families. However, any grants or state early education initiatives districts receive or participate in come with requirements that services be free or that funds not be commingled with private tuition. For example, state law requires that public special education programs for ages 3-to-5 and state preschool programs be coordinated and prohibits using special education apportionments to supplant other funding sources.
All three San Bernardino County districts with inclusion preschool programs are likely billing California’s Medi-Cal program for certain health and therapy services provided to students receiving individualized education instruction in these preschool programs. For instance, speech therapy or occupational therapy delivered to a Medi-Cal eligible child can generate reimbursement to the district. This is an additional public funding stream flowing into the program, federal Medicaid funds on top of education funds and parent-paid tuition. While Medi-Cal billing is an accepted practice, it underscores that the true cost per special education student is already being subsidized by public funds, raising a question if parents’ tuition for peers is necessary, and whether such charges are being used, perhaps illicitly, to generate extra revenue.
In summary, CHAMPS, Step Up, and CLOUDS are hybrid-funded: they are financed through special education budgets and other public education funds, yet also collect private tuition from general education families. The general education teacher salaries, for example, may be paid out of the Local Control Funding Formula general funds or special education funds, and the facilities, classrooms, and utilities are district-provided. Any use of Title I or other grants would further indicate public funding. This mixed funding model is where legal risks arise.
Charging tuition to general education students in a public school program, particularly one intertwined with special education, creates several legal and ethical problems. One of these problems is the violation of California’s free public education guarantee.
The California Constitution and the California Education Code guarantee free public education to all students in the state’s public school system. While preschool for general education children is not mandated, once a district enrolls a child in a district-operated educational program, that child is arguably a public school student entitled to education without fees. California Education Code §49011, which deals with pupil fees, prohibits public schools from charging pupils or families for educational activities that are part of the school’s offer of education. In these inclusion programs, the general-education students are participating in a school-run instructional program, not a separate child-care service. Requiring tuition as a condition of enrollment could be seen as an illegal pupil fee, unless there is specific statutory authorization. No such authorization exists for districts to charge tuition for general education in district preschool programs, which makes the practice legally precarious. By contrast, Capistrano Unified School District avoids this issue by not charging its preschoolers. They treat those children as public-school students, not customers.
Under the Individuals with Disabilities Education Act (IDEA) and California law, preschool children with disabilities are entitled to a Free Appropriate Public Education (FAPE) just like K-12 students. Free and public education must be provided “at public expense, under public supervision and direction, and without charge” to the parent, according to the California Education Code. It explicitly must include preschool education when appropriate. In an inclusive classroom, the presence of students without learning disabilities is part of special education students’ appropriate public education; for example, a mixture of students with differing cognition levels can be written into individualized education programs as support. [If a district makes admission to such classes contingent on some parents paying tuition, it raises the question of whether the special education students are truly receiving education at no charge.] The district might be relying on students with tuition-paying parents to fill out the class and provide an educational setting; if so, the special education student’s Free and Public Education environment is effectively subsidized by the parents of general education studens also attending those classes, which undermines the “public expense” principle of the “Free and Public Education” concept. At minimum, it creates inequity; the district is enriching its special education program by charging other families, rather than footing the full cost itself as required. This could be viewed as an Individuals with Disabilities Education Act compliance issue or even a form of discrimination (only children from families who can afford $300/month get to be so-called “peer models,” possibly excluding low-income students who could benefit and contribute.
Using multiple funding sources for the same service in improper ways can violate state and federal fiscal rules. For example, if a district receives Americans with Disabilities Act funds passed through by the State of California or special education dollars to operate an inclusion preschool and collects full tuition from parents for the same program, it may be double-dipping. Essentially, the district is paid twice for one service, once by taxpayers and once by parents. California’s education funding is intended to cover the cost of educating each child; asking parents to pay on top of that – without a clear statutory allowance – could be seen as a misappropriation of funds. There are federal anti-supplanting provisions as well: e.g., federal special education grants must supplement state/local funding and not pay for things that are also being paid out-of-pocket by others. As another example, if Title I or any grant helped pay for a teacher’s salary in these programs, charging tuition could violate the condition that those funds not be supplanted or offset by private payments. In short, the commingling of public funds and private tuition revenue for the same program invites accusations of financial impropriety. A public audit might ask: Are these districts reducing their contribution and effectively running a profit center by charging tuition while also being funded by the state? Any indication that the tuition money is not strictly going to additional services, but rather offsetting costs already funded by the state, would be problematic. Capistrano Unified School District’s model steers clear of this by not mixing public Special Education Funds with student tuition in the same classroom; there’s no risk of double billing for the same service.
If a typically-developing child without disabilities is invited or encouraged to be in an inclusion class as a “peer model,” one could argue that the child is now receiving a public educational experience, preschool instruction in a public-school setting. Should that child also be entitled to a free, appropriate education? While preschool isn’t guaranteed for general education, the moment the district deems it appropriate to educate that child in a public program, the spirit of free public education suggests it should be free. The districts likely position their programs as “optional” enrichment, thus charging a fee. However, given that transitional kindergarten is now available free for all 4-year-olds in California, telling a parent you must pay $300 for essentially a TK-like class because it’s under a different name, i.e., inclusion preschool, is legally questionable and could be challenged as unequal treatment. This is especially true if the child is dual-enrolled in transitional kindergarten; a TK student cannot be charged tuition for their public education, so any “participation fee” for the preschool portion looks like an attempt to circumvent free school requirements.
Charging tuition also raises questions under California law about the use of public resources. The classrooms, utilities, and many staff are publicly funded; if the district is generating private income in the form of tuition from those resources or the use of those facilities, it must be authorized and accounted for.
Without clear authority, it could be viewed as a gift of public funds or a misuse to run what is effectively a private preschool business on public school campuses. The law does allow fees for certain things e.g., facility rental to private groups, or adult education fees, but a grey area exists for preschool. If a program is part of the district’s educational mission (especially inclusion for special education), then charging for it is suspect. The Capistrano Unified School District avoids this grey area by structuring the peer involvement – the mixture of special education preschool students with cognitively normal/general education preschoolers – as part of the public special education program. This involves no exchange of money, no exploitation of public resources for extra revenue.
Charging tuition in these inclusion settings exposes the districts to potential legal challenges on multiple fronts: violation of the free school guarantee, non-compliance with the Individual Disability Education Act/the Free and Public Education principle, which mandates services “without charge” to families, and the impermissible double funding of programs. These practices can be characterized as fraudulent or mismanaged if the districts are essentially getting paid twice for the same service or using restricted public funds in ways not intended, while burdening parents financially.
Capistrano Unified offers a useful foil to the above practices. Capistrano Unified has a large special education preschool program serving children with disabilities aged three to five years that incorporates typical “peers” as role models, but the district has taken care to separate funding and enrollment streams
The district’s special education preschool classes include a limited number of “peer model” slots in free special education inclusion classes for typically developing children. These so-called peers are selected through an application or screening process, often prioritizing children of district residents or even children of district employees, to participate for the benefit of the class. Importantly, these peer model students are not charged any tuition or fees; they are treated as part of the class, attending on the same schedule, subject to the same attendance rules, but without any financial requirement. In essence, they are public school students receiving an inclusive educational experience. This aligns fully with Free and Public Education principles, as the special education students get the benefit of peers at no cost, and the peers themselves receive a free public preschool experience. It also ensures equity participation isn’t limited to those who can pay.
Capistrano Unified School District also operates general preschool tuition-based programs that are completely separate from the special education classes. For example, the distirct runs fee-based preschools or contracts with outside providers for families who want a traditional pre-K program and don’t mind paying.
These are run at different times or locations from the special education inclusion classes. The key is that the tuition funds and public special education funds do not mix. A child in the fee-based program is not simultaneously counted as a peer in a special education class, and vice versa. By clearly delineating the two, Capistrano avoids any perception of double dipping. Parents essentially have two routes: if their child is chosen as an inclusion peer, they attend the public program for free because their presence serves an educational purpose for other students; if not, they could pay to attend a separate preschool which has no special education students and is more of a traditional preschool experience.
Capistrano’s model demonstrates that the district recognizes the legal necessity of providing special education at no cost and the risk of co-mingling funds. District officials were likely given legal guidance that charging peers in an individualized education program-driven class could jeopardize compliance. By keeping peer participants as unpaying ones, Capistrano can confidently claim it provides special education in the “least restrictive environment” with cognitively normal students, without charging anyone for the instructional program. Any revenues from preschool services are from wholly separate programs that are not tied to special education funding. This level of separation increases transparency. Auditors or the public can see how many dollars go into special education preschools and from where, versus any self-supporting general preschool program. There’s no need to reconcile parent fee revenue in a special education budget or explain to California Department of Education/Individuals with Disabilities Education Act monitors why parents pay for part of a public program.
In practice, the Capistrano Unified School District might, for example, list its peer model program under the Special Education Department, with its guidelines and (free) enrollment forms, whereas any fee-based preschool is listed under Child Development or Community Education departments with separate fee schedules. If any peer model families were inadvertently charged for something, the Capistrano Unifed School District likely has a refund or waiver process to correct it. This all serves to protect the district from the kinds of allegations now facing the other districts, which extend to misusing public funds and charging illegal fees. It also has the benefit of greater inclusivity – by not charging, the district can include a socioeconomically diverse group of preschool stundents in its program, not just those who can afford preschool.
In short, Capistrano Unified School District complies with the letter and spirit of the law by clearly separating its publicly-funded special education inclusion preschool which is free for all participants, from any tuition-based general education preschool offerings. This model provides a stark contrast to Alta Loma, Upland, and Etiwanda, which have blended public and private funding in a way that creates legal vulnerabilities.
The financial stakes of these programs – and the potential “double funding” are significant. An estimated side-by-side financial impact for each of the Inland Empire districts, combining tuition revenue and public funding, is very telling.
The Alta Loma Unified School District CHAMPS program operates at least one site, Carnelian Elementary School, with morning and afternoon sessions Monday through Thursday. Each session can serve several general education students alongside special education students. Assuming eight students per session, that’s 16 tuition-paying children per day. At $290 per month over a 10-month school year, each paying student yields $2,900 annually. Tuition collected would be on the order of $46,400 per year (16 × $2,900) for one classroom. Alta Loma may have more than one class if CHAMPS runs at additional schools or multiple classes at Carnelian, which would multiply the revenue. Conservatively, $50,000/year in parent payments is being collected. Meanwhile, the costs of the program are largely covered by the district’s special education allocation. For instance, the special education teacher and aides are funded via state/federal special education funds; any general education instructor might be paid from the Local Control Funding Formula or special education funds. The public funding supporting CHAMPS personnel, facilities, and materials likely exceeds $200,000 annually for salary, benefits, and services, all drawn from taxpayer funds.
Alta Loma does not get Americans with Disabilities Act funding for 3-year-olds, but any 4-year-old students eligible for transitional kindergarten could be bringing in roughly $10,000 each in local control funding if counted as transitional kindergarten fee recipients. Even if not, the LCFF base grant indirectly supports the program, covering overhead, etc. The total financial impact is roughly $50,000 private + $200,000+ public for Alta Loma’s program. If only one class, the tuition is a small supplement, 20 percent or so of the program cost. If these are part of multiple classes, the scale would rise accordingly.
Upland Unified School District’s Step Up preschool program likely operates at one or more elementary sites. If Upland Unified has two inclusion classes, morning and afternoon and each session has 10 paying peers, that’s 20 peers total per class times 2 classes, an equivalency of 40 students. At $300/month ($3,000/year each), the tuition revenue would be about $120,000 per year (40 × $3,000). Public funding covers the rest, those costs being two special education teachers, two general education teachers, aides and therapists. This can accumulate to being in excess of $400,000 in expenditures funded by special education and Local Control Funding Formula. If any of those peers are age 4 turning 5, which corresponds to the transitional kindergarten age requirement, Upland Unified could be drawing Americans with Disabilities Act funds for them, which might add, perhaps, $80,000, assuming 8 such students times $10,000 each.
The total impact for Upland Unified would therefore be on the order of $120,000 from tuition, plus several hundred thousand in public funds. The parent fees thus make up a notable chunk of the program’s funding. If Upland’s program is smaller (say only one class total), the numbers would be roughly halved ($60,000 tuition, etc.). Regardless, tens of thousands of private dollars are flowing into a program also supported by state/federal money.
The Etiwanda Unified School District CLOUDS program is the largest of the three preschool efforts surveyed in San Bernardino County. Etiwanda Unified has historically operated inclusion preschool classes at multiple elementary sites, with both morning and afternoon sessions, though recently the district has collapsed classes to fewer sites, indicating perhaps three classes instead of six, for example, due to staffing or enrollment issues. Assuming Etiwanda Unified currently runs four inclusion classrooms (across three to four school sites) with am/pm sessions and eight to ten paying students at $300 per month, tuition revenue would be roughly $192,000 per year [8 paying student/peers X 2 sessions X 4 classes = 64 tuition-paying students X $300/month or $3,000/year]. On top of that, Etiwanda has aggressively used transitional kindergarten dual enrollment for older preschoolers, meaning possibly a few dozen of those peers are generating state Americans with Disabilities Act funds. For instance, if 20 of those peers are counted as transitional kindergarten students, and Local Control Funding Formula yields $12,000 each, given additional Local Control Funding Formula concentration factors, etc., that is about $240,000 in Local Control Funding Formula money the district receives for those children. Even half that number of transitional kindergarten peers would bring in $120,000. Special education funding covers the core staff costs: with four special education teachers, four general instructors, numerous aides and therapists, the special education budget commitment is likely over $800,000 for salaries, benefits, and services.
Title I does not appear to be a factor in Etiwanda’s case; their sites, like Terra Vista, are not typically Title I schools, mainly receiving state and special education funds. Summing the pieces, Etiwanda’s CLOUDS program might involve roughly $150,000-to-$200,000 in parent tuition plus possibly a six-figure sum in Local Control Funding Formula/Americans with Disabilities Act money for transitional kindergarten dual-enrollees, on top of nearly $1 million in special education funds. This combined funding far exceeds what is needed to run a single preschool class, suggesting that if enrollment is managed cleverly, the district could even profit. In other words, if tuition and Amereicans with Disability Act funding together could outpace the marginal cost of adding general education children into the preschool program. Such a scenario would be a red flag for state or federal auditors or investigators. It suggests the district might be using the program as a revenue generator under the guise of inclusion.
In the Capistrano Unified School District’s preschool program model, no tuition revenue is collected for the inclusion program, so $0 is coming in from parents. All funding is public.
If scope is compared, the Capistrano Unified School District, given its size, might run, say, eight special education preschool classes with, perhaps, three cognitively normal peers in each class for a total of 24 such cognitively normal peers in special education classess districtwide. The district thereby forgoes what could be $72,000/year in tuition if it charged $3,000 per cognitively normal student each, but it also avoids all the potential legal risk. Instead, the Capistrano Unified School District likely uses a mix of special education funds and possibly state preschool or local control funding formula funds if it offers universal preschool for general education in separate classrooms.
The district’s separate general education preschool has a tuition schedule, but that revenue stays within that program and doesn’t mix with special education. The financial impact for Capistrano’s inclusion classes is simply the cost to run them, funded by state/federal dollars, which is exactly what state law and the California Education Code dictates, with classes offered to special education students paid for at public expense and at no charge to the parents of students who attend those classes.
The above estimates are illustrative, but they show that each Inland Empire district is handling on the order of in excess of $100,000 in annual private payments from families, intertwined with hundreds of thousands of public dollars for these preschool programs. These numbers underscore why proper accounting and legality are of the utmost importance. This is not a trivial bake sale amount, but substantial funding that, if misused, could constitute financial fraud in an amount likely to make state auditors sit up and notice. If parents, due to having paid out illegal fees, were to demand refunds or the State of Califoria were to claw back Americans with Disabilities Act funding due to double dipping, the districts could be liable for returning significant sums.
The Alta Loma, Upland, and Etiwanda school districts charge monthly tuition of around $290–$300 to parents of general education children who serve as peers to special education students in those districts’ inclusion preschool programs. Capistrano Unified School District, in contrast, does not charge tuition for peer participants in its similar program, keeping special education inclusion free for all involved.
Each inclusion program is supported by public education funds. Including special education funding to pay for credentialed special education teachers, aides, and services. In some cases, those district’s also collect general Local Control Funding Formula/Americans with Disabilities Act funding, in particular where four-year-old students are dual-enrolled as transitional kindergarten students, effectively drawing state funds while also being in the preschool class. Additional funding – such as Medi-Cal reimbursements for therapy and possibly Title I or other grants – contributes to these programs. Thus, the districts are already funded by taxpayer dollars to run these classes, yet they additionally require parent payments.
Charging tuition in these circumstances presents serious legal risks. It likely violates California’s prohibition on public school pupil fees and obliterates the constitutional guarantee of free public education, since a school district-operated instructional program is not supposed to charge families to attend.
It may conflict with the Individuals with Disabilities Education Act/Free and Public Education mandates, because special education, including inclusive settings, must be provided without charge to families. Relying on paying “peers” to implement an individual education program could be seen as undermining that requirement. It raises “double dipping” concerns, where the district might be receiving both public funds and private funds for the same service. This could violate state funding rules, or at minimum constitute an unethical supplanting of public responsibilities with parent money. There is potential this will trigger an audit, result in untoward audit findings and result in legal action. Parents could file complaints or even a class-action lawsuit for the return of illegal fees. Internal documents and complaints in Etiwanda indicate governance issues. A lawsuit already filed against the district alleges significant misconduct in the CLOUDS program, indicating broader problems beyond just finance, such as physical abuse of children
The Capistrano Unified School District appears to be in compliance with all applicable state and federal laws pertaining to preschool and transitional prekindergarten funding. with no co-mingling of tuition paid by parents and state funding, whereas the three San Benardino Couty district surveyed are operating a hybrid public/private model that is legally questionable.
The term “fraud” could apply if districts knowingly exploit funding formulas, as in those cases where students who were paying tuition were included among the roster of students counted in applications for Americans with Disabilities Act funding or where the nature of the program was misrepresented to state of federal agencies to obtain financing. One area auditors might examine would be tuition funds having been deposited into accounts that also held state special education dollars. Another would extend to how money provided to the district by the State of California and money coming into the district through tuition paid by parents was expended and whether those monies were kept in separate and sequestered accounts. Lack of clear answers could point to fiscal mismanagement.
There is documentation indicating the fee structures, internal communications about program adjustments, and even evidence of dual enrollment attendance accounting, all of which build a case that the three San Bernardino County school districts surveyed – in their the CHAMPS, Step Up, and CLOUDS preschool programs – engaged in practices that may not withstand legal or public scrutiny. Meanwhile, established definitions in law underscore that such educational services should be provided at no cost to families, supporting arguments that these tuition charges are impermissible.