The global COVID-19 pandemic has caused dramatic changes in the landscape for child care and early education programs in the United States. Already operating on fragile margins, child care programs have experienced financial upheaval as a result of mandated closures in some states, fluctuating and unpredictable demand for child care, increased health and safety regulations (including decreased ratios and stringent cleaning procedures), and shifts in school district plans for full or partial virtual learning for K—12 education. Enrollment in child care programs decreased while costs for providers increased.

As policymakers consider responses to the child care financial crisis, they must ensure that their decisions reflect the unique financial needs and structures of child care programs. Guidance and technical assistance are needed to support state policymakers in allocating financial resources to promote short- and long-term sustainability of child care programs.

Key Findings

  • The pandemic may increase costs for child care programs because of decreased class or group sizes (creating higher personnel costs), purchases of supplies for cleaning and sanitizing, purchase of personal protective equipment and modifications to the existing space to accommodate COVID-19 guidelines.
  • Revenues for child care programs may decrease because of closures, reductions in enrollment capacity and decreased enrollment, all of which result in lower tuition and fees paid by families.
  • Real-time data to document program costs (for example, number of open classrooms, attendance by child age and staffing levels) are not readily available for child care programs in most states. A variety of data sources are available to learn about child care programs’ costs including existing administrative data, provider surveys, cost modeling tools/calculators and applications for funding; each of these data sources is limited in the information it offers.
  •  Data about families and their use of child care is also limited. Factors affecting family decision-making about child care include employment status, essential worker status, schooling status of older siblings and concerns about health and safety. Family surveys, census data and patterns of child care enrollment are possible sources of data to understand family need and use of child care during the pandemic.
  • Considerations for distributing funds to child care programs should begin with an articulation of the goals for the funding and the populations of programs to prioritize. The paper offers a set of principles that state decision-makers can attend to when implementing grants or other payments to child care programs including: equity, transparency, timeliness, burden on applicants and recipients, flexibility and impact.