The expiration of child care stabilization funds from the American Rescue Plan Act (ARPA) has left the sector facing significant challenges. A new report by The Century Foundation’s Julie Kashen and Laura Valle-Gutierrez offers a comprehensive look at the impact in five states: New York, Ohio, Pennsylvania, Virginia, and Wisconsin. It paints a stark picture of the struggle faced by families, child care providers, and the broader economy.
Key Findings of the Report:
ARPA Stabilization Grants: A Lifeline During the Pandemic The ARPA stabilization grants were a vital support system for child care providers during the pandemic. In every state analyzed in the report, 30-40% of child care programs indicated that they would have been forced to shut down without this funding. The grants were not a permanent solution but a critical life raft for an already strained system.
Lingering Pre-Pandemic Challenges and Post-Funding Struggles The child care crisis existed long before COVID-19, with high costs and limited access being persistent issues. The pandemic only magnified these challenges. While ARPA funds temporarily alleviated some of the pressure, their expiration has plunged the sector back into uncertainty. In Wisconsin, 100% of surveyed child care programs reported being adversely affected by the end of ARPA funding, with 40% losing staff between October 2023 and April 2024.
Rising Costs and Limited Options for Families With the expiration of stabilization funds, child care prices have soared. In New York, child care costs have surged by 46% compared to 2019, placing an enormous financial burden on families. As prices climb, options dwindle, leaving parents scrambling to find affordable, quality care for their children.
State Investments Mitigate Some of the Damage The report highlights that states investing additional resources into child care have fared better than those that haven’t. However, even with state-level efforts, the absence of robust federal funding has left gaps that local initiatives cannot fully bridge. States that have relied on other short-term federal pandemic funds have managed to stave off some of the worst effects, but these funds are set to expire this week, putting the sector at risk for even more profound damage.
The Path Forward: What Needs to Happen?
The report emphasizes that while temporary funding measures have helped, they are not a long-term solution. The child care sector urgently needs sustainable, robust federal and state investments to ensure that child care programs can thrive, prices can stabilize, and families can access the care they need.
Without immediate action, the ripple effects will continue to squeeze families, push quality care out of reach, and destabilize a vital part of the economy. Investing in child care is not just about keeping programs open; it’s about securing the future for children, supporting working parents, and building a stronger, more resilient society.