China’s Landmark Kindergarten Fee Reform: What the New 2025 Policy Means for Parents and Investors

• Universal Access: Promote preschool education across all regions
• Affordability: Ensure costs are manageable for all income levels
• Safety & Quality: Maintain high standards in childcare facilities
• Birth Support: Align with national birth rate initiatives

China just dropped a major policy overhaul on kindergarten fees.

The National Development and Reform Commission (Guojia Fazhan he Gaige Weiyuanhui 国家发展改革委), the Ministry of Education (Jiaoyu Bu 教育部), and the Ministry of Finance (Caizheng Bu 财政部) jointly released Document No. 1644 (2025)—a sweeping circular designed to standardize how kindergartens charge families across the country.

This isn’t just bureaucratic shuffling.

The policy directly tackles affordability, accessibility, and quality in preschool education while supporting China’s broader birth support initiatives.

Let’s break down what changed and why it matters.

Why China Needed a Kindergarten Fee Overhaul

Here’s the reality: childcare costs have been a major barrier for Chinese families considering having more children.

Inconsistent pricing structures, hidden fees, and regional variations created confusion and financial strain.

The government recognized this as a critical issue tied to birth rates—and decided to act.

The new framework aims to achieve four core goals:

• Promote universal access to preschool education across all regions
• Ensure affordability for families at all income levels
• Maintain safety and quality standards in childcare facilities
• Support China’s national birth support policy framework

Essentially: make kindergarten cheaper, clearer, and more accessible.

The Four-Category Fee System Explained

Gone are the days of ambiguous kindergarten charges.

The new policy creates strict categorization so parents know exactly what they’re paying for.

Here’s the breakdown:

1. Education Fees (Childcare and Education)

Core charges for providing preschool education services to children enrolled in the facility.

This is the primary fee structure that most families encounter.

2. Accommodation Fees

Charges specifically for boarding services in residential kindergartens.

Only applicable if your child stays overnight—not standard for most kindergartens.

3. Nursery Care Fees (Tuoyu Fuwu 托育服务)

A new category for facilities offering nursery services to infants and toddlers aged 2–3 years old.

This reflects China’s growing focus on early childhood development and supports younger families.

4. Service-Related and Commissioned Fees

Optional charges for voluntary services outside normal education hours (think: after-school programs, special classes, materials).

Commissioned fees cover costs when the school handles third-party services for parental convenience.

Critical detail: Services directly tied to normal education or items already covered by government funding cannot be charged separately.

No hidden fees disguised as “extras.”

How Fees Are Actually Set Now (Public vs. Private Kindergartens)

The policy creates different pricing mechanisms depending on the type of kindergarten.

This matters because it balances affordability with operational sustainability.

Inclusive and Non-Profit Kindergartens: Government-Guided Pricing

This includes public kindergartens and affordable private kindergartens (Puhuixing Youeryuan 普惠性幼儿园).

Here’s how the pricing works:

• Provincial education departments propose benchmark rates and floating ranges
• Development and reform departments verify these benchmarks
• Individual kindergartens set their rates within the authorized range
• Rates are treated as administrative charges for public institutions

Translation: You’re getting transparency and standardization without losing local flexibility.

Regions can adjust for their economic conditions, but within guardrails.

For-Profit Private Kindergartens: Market-Based Pricing

Private, for-profit kindergartens operate differently—they set their own rates based on:

• Operating costs and business model
• Market demand and competition
• Quality and services offered

The catch: They must report rates to local education authorities, and regulators will monitor costs to prevent price gouging.

Basically: The free market works, but there’s oversight to prevent exploitation.

The Cost-Calculation Framework: What Can Actually Be Charged

Here’s where it gets detailed—but important for understanding what drives prices.

Fee standards are based on actual operating costs after deducting government subsidies and donations.

Authorities conduct cost audits or investigations to ensure accuracy.

Permissible costs include:

• Staff compensation: Salaries, allowances, benefits, and social security contributions
• Operational expenses: Official business costs and day-to-day operations
• Maintenance and facilities: Site rent, repairs, and upkeep
• Asset depreciation: Costs for fixed assets (excluding government-funded items)

When calculating costs, institutions should allocate expenses based on class size (Large, Medium, or Small classes).

This ensures fairness—a small class doesn’t subsidize a large one.

What’s explicitly excluded:

Abnormal expenses like disaster losses or accident-related costs cannot be passed to families through regular fees.

This protects parents from unexpected financial burden-shifting.

How Local Economics and Affordability Factor In

The policy requires authorities to consider:

• Local economic development levels (rural areas ≠ tier-1 cities)
• Public affordability relative to regional incomes
• Market supply dynamics and competitive landscape

This isn’t one-size-fits-all pricing.

A kindergarten in Shanghai operates in a different economic reality than one in Sichuan, and the framework accounts for this.

The Transparency and Supervision Framework

Beyond pricing rules, the policy establishes real accountability mechanisms.

A new “Catalog List System” will be implemented where education departments publish approved service-related and commissioned charges.

No fees outside this catalog can be charged.

Additionally, kindergartens must maintain and publicly display their own catalogs showing:

• Institution type (public, private, non-profit)
• All fee items and standards
• Legal basis for charges

Distribution channels: Websites, social media, admission brochures.

Parents should be able to find this information easily before enrolling.

Prohibited Practices: The Hard Boundaries

The policy explicitly bans several sketchy tactics that have been used to extract extra money from families.

Kindergartens cannot:

• Charge fees across multiple semesters in advance (no pre-paying for a year upfront unless explicitly agreed)
• Hide education fees as “transition classes” or “interest classes” designed to prepare kids for primary school
• Call charges “donations” or “fundraising” linked to admission decisions
• Collect fees through parent committees or allow third parties to charge families directly

These restrictions target common loopholes that families have complained about.

The message is clear: Stop disguising mandatory fees as optional services.

The Utility Cost Break: A Real Financial Win

Here’s a practical policy detail that reduces operational costs significantly:

Water, electricity, gas, and heating for kindergartens will be charged at residential rates instead of commercial rates.

Why does this matter?

Commercial utility rates are typically 20-40% higher than residential rates in most Chinese cities.

This single change meaningfully reduces kindergarten operating costs, which directly translates to lower fees for families.

Fiscal Support and Sustainability

The policy doesn’t just mandate lower fees—it ensures kindergartens can actually operate sustainably.

Fiscal subsidies will be coordinated with fee policies to create a sustainable cost-sharing mechanism.

Translation: Government funding covers the gap between realistic operating costs and what families can afford to pay.

This prevents kindergartens from underfunding salaries or cutting corners on quality.

When Does This All Take Effect?

January 1, 2026.

That gives provinces, cities, and individual kindergartens time to restructure their pricing before the new framework kicks in.

Any prior regulations inconsistent with this policy will be superseded.

What This Means for Different Stakeholders

For Families:

• Lower, more predictable costs through standardized fee structures
• Transparency: Clear knowledge of what you’re paying and why
• Protection from hidden fees and exploitative pricing tactics
• Better affordability support for middle and lower-income families

For Kindergarten Operators:

• Clear cost guidelines for setting sustainable pricing
• Reduced utility expenses through residential rate treatment
• Coordinated fiscal support to supplement fee income
• For-profit flexibility while maintaining oversight accountability

For Policymakers and Society:

• Reduced barriers to childbearing by lowering childcare costs
• Standardized quality and safety standards across regions
• Measurable progress on birth support goals through affordability improvements
• Clearer market dynamics for preschool education sector planning

The Bigger Picture: Why This Matters Now

China’s birth rate has been declining for years.

Childcare and education costs are a major factor keeping families from having more children.

This policy directly addresses that economic friction point.

By making kindergarten more affordable and transparent, the government is removing one significant barrier to family expansion—which supports broader demographic and economic policy goals.

For investors and founders in the education space, this signals something important: the Chinese government is serious about investing in early childhood development as a strategic priority.

That means funding, infrastructure, and opportunities—but also tighter regulation and standardization.

The days of free-wheeling, high-margin kindergarten operations are over.

The future is standardized, transparent, and focused on accessibility.

Key Takeaways

• Kindergarten fees are now strictly categorized into education, accommodation, nursery care, and optional service fees
• Public and non-profit kindergartens use government-guided pricing within authorized ranges
• For-profit private kindergartens set market-based rates with regulatory oversight
• Fee standards are based on audited operating costs minus government subsidies and donations
• Utilities will be charged at residential rates, not commercial rates, reducing costs
• A Catalog List System ensures transparency—no charges outside approved lists
• Prohibited practices include advance semester charging, disguising fees as donations, and hidden third-party charges
• The policy takes effect January 1, 2026

The kindergarten fee reform represents China’s commitment to making early childhood education more accessible and affordable.

Whether you’re a parent weighing childcare costs, an operator navigating the new framework, or an investor watching the preschool sector evolve, this policy reshapes the landscape.

References

• Circular on Improving Kindergarten Fee Policies – National Development and Reform Commission (NDRC)
• Notice Regarding the Improvement of Preschool Charging Standards – Ministry of Education of the People’s Republic of China
• New Guidelines for Kindergarten Fees and Childcare – State Council of the People’s Republic of China