I have made them before, but this time I did it better, thanks to a link on Pinterest and some tweeking! Here's the link to the directions I went off of, but I wanted to show you how I did it in case you find yourself needing to make graduating caps for little ones.
Here's my little preschool graduate in her cap
Measure around the child's head, leave some overlap, and trim if needed. Fold along the length of the band a flap about one inch wide, and cut 8-10 triangle notches.
Take yarn, or whatever you want to use for your tassel, and cut strips 36 in, 24 in, and 4 in. Don't worry if your measurements aren't exact, it wont matter.
Wrap the 36 inch piece around the small rectangle, this will become the tassel part.
Use the 24 inch piece to loop through the top of the tassel and tie a knot.
Then just cut the bottom of the tassel loops (that are wrapped around the little rectangle) and trim to make them even lengths
Use the 4 inch piece of yarn to wrap around the tassel about 3/4 inch down, tie a knot, and cut off the ends if they don't lie down nicely with the rest of the tassel.
Pop a hole in the middle of the square with a scissors or whatever you have handy.
I had to use some spit to get the ends of the tassel to stay together enough to get into that tiny hole in the hat. Some type of threader would be recommended if you think you're about to chuck it across the room in frustration. Don't chuck it! I did it, you can too! Then put a piece of tape over the underside of the hole to secure the tassel.
Fold the band around, measured to fit your child's head, and staple closed. I only did the 8 notches that the directions called for, I think it would have been nicer if I added a couple more. Put glue on the rim of the band...