Overview

Maryland (MD), like other states, has faced two primary challenges with its child care subsidy program (referred to as scholarships in MD): (1) serving a small proportion of families eligible for a scholarship[1], and (2) ensuring families have equal access to high-quality care, regardless of their income. Families in MD continue to face barriers to accessing child care scholarships, particularly Black and Spanish-speaking families. However, following the 2014 reauthorization of the Child Care and Development Fund (CCDF) program, the state made several policy improvements to promote equitable access to high-quality care. Subsequently, following the COVID-19 pandemic, Maryland made additional policy changes resulting from the federal pandemic relief funds for CCDF, to help stabilize the child care sector.[2]

This report provides information from a mixed methods study that examined the experiences of families and child care providers participating in Maryland’s child care scholarship program following policy changes made from 2015–2019. These policies include a requirement for child care providers to participate in Maryland EXCELS, the state’s quality rating and improvement system (QRIS); several increases in the provider reimbursement rate, ultimately increasing from the 10th to the 30th percentile of the 2019 market rate survey (MRS); and raising family income eligibility for scholarships from 32 percent to 65 percent of the state median income (SMI). While experiences with the scholarship program in relation to the pandemic were not specifically explored, we also asked providers about the benefits of the subsequent reimbursement rate increase to the 60th percentile of the 2019 MRS that occurred during the pandemic in November 2020.

Findings

Providers’ experiences:

• Interrupted time series analyses indicated an increase in the percentage of licensed FCC and center-based providers serving children with scholarships following the elimination of waitlists and increases in eligibility levels and reimbursement rates. Additionally, while providers in lower-income communities serve more children with scholarships, we found that higher-income communities saw a larger increase in the percentage of providers serving children with a scholarship.
• Of the 984 providers surveyed, most providers were participating (59% centers, 40% FCC providers) or willing to participate (20% centers, 37% FCC providers) in the scholarship program. Most providers interviewed, who had changes in the number of children with a scholarship they serve, said this was a fluctuation in the number of families with a scholarship seeking care rather than a decision to serve fewer families with scholarships or not participate in the scholarship program.
• Providers participating in the scholarship program reported several challenges with participation during interviews, including delayed payments (due to delays in processing retroactive payments and families’ applications), paperwork burdens, issues collecting parent copayments, and low reimbursement rates.
• At the time of the survey, 50 to 66 percent of providers were aware that MSDE had increased provider reimbursement rates in November 2020. Of the providers who were aware of the reimbursement rate increase, most reported that the increased rate benefited families and resulted in families paying lower fees.

Parents’ experiences:

• Most of the 666 parents surveyed said they had searched for care due to a change in their work schedule (80%) and/or to provide an educational or social enrichment for their child (76%). About a quarter (22%) of parents also said they searched for care because they were not satisfied with their former child care provider.
• Parents commonly reported using the internet (46%) or asking family, friends, neighbors, or co-workers for recommendations (41%) when searching for a child care provider.
• Most surveyed parents reported that it was easy or somewhat easy to fill out the child care scholarship application (81%) and provide all the required documents (75%). However, parents in focus groups talked about the application process being time-consuming and burdensome, and many reported that they had difficulty communicating with Child Care Central 2 (CCC2)—the vendor that administers child care scholarship applications and payments. Over one third of parents (39%) said that it was difficult to have staff at CCC2 answer questions about the application.
• Most surveyed parents also found that it was easy (76%) or somewhat easy (14%) to find a provider that accepts a child care scholarship, although limited availability or lack of child care options was a common challenge for families living in rural areas of the state.
• There was a significant increase from January 2018 to January 2020 in the percentage of children with a scholarship who used higher-quality providers (levels 3–5 in Maryland EXCELS). This finding was consistent across families with varying household income levels, race/ethnicities, and with varying levels of urbanicity. Moreover, surveyed parents who changed providers after receiving a scholarship generally reported that their new provider was “much better” or “somewhat better” on several quality indicators. For instance, 74 percent reported their provider was “much better” at helping their child be ready for school, but only about half thought their new provider was more affordable.

The brief concludes with recommendations that Maryland and other states/territories can consider to promote access to child care scholarships.

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Footnotes

[1]  Child care scholarships (often referred to as child care subsidies in other states) are a form of financial assistance for child care costs for eligible families in Maryland with low incomes who are working or in an education or training program.

[2]  For more information about parents’ experiences with child care in Maryland during the pandemic, see Child Care Utilization in Maryland During the COVID-19 Pandemic (https://www.childtrends.org/publications/child-care-utilization-in-maryland-during-the-covid-19-pandemic).