Families and providers scramble after childcare programs lose federal funding

Providers say millions of children and their families are now at risk of losing vital daycare services. After two years of receiving federal subsidies, 220,000 child care programs across the country were cut off from funding recently. The largest investment in child care in U.S. history, the monthly payments ranged from hundreds to tens of thousands of dollars, and stabilized the industry during the COVID-19 pandemic.

"It feels like they're just setting everyone up for failure," Adkins said, dropping her 2-year-old and 1-year-old twins at daycare on a recent morning before an hour-and-a-half drive to class.

For years, providers have been raising alarm about an unsustainable business model that burdens families with high costs and leaves centers with razor-thin profit margins — issues only exacerbated by inflation and a significant workforce shortage.

Now, providers say that without additional investment, they face the possibility of shutdown. The Century Foundation, a progressive think tank in Washington, D.C., analyzed a provider survey and government data, and concluded that in five states — Arkansas, Montana, Utah, Virginia and West Virginia — as well as Washington, D.C., up to half of all providers may be forced to close.

Many families and providers are calling on Congress to create a permanent funding solution to the crisis, warning of the ripple effects on the nation's economy. A Democratic proposal failed last month without any Republican support. It would have continued the grants for five years with $16 billion allocated annually.

The most at-risk providers are those in rural communities that predominately serve low-income families. 

Starting in October 2021, Democrats' American Rescue Plan Act disbursed $24 billion in payments to providers across the country, with varied funding based on program size and quality rating. The legislation also included $15 billion to expand the block grant program that subsidizes the cost of child care for low-income families, though it is set to expire in September 2024.

As of May 2022, the median pay for a child care worker in the U.S. was $13.71, compared with $10.47 in West Virginia, according to the U.S. Bureau of Labor. Wage growth in the industry has fallen behind other low-wage professions.

Over the years, Goldie Huff, a waitress at a steakhouse in Williamson, has cared for more than two dozen foster care children. There are just two child care centers in the entire county, and the community can't afford to lose either one, she said.

Policymakers should not only be worried about shuttering centers, but also about the quality of care and education available with such limited resources, said Melissa Colagrosso, CEO of A Place To Grow Children's Center, in Fayetteville, West Virginia. Since they opened 28 years ago, the number of accredited centers in the state has been halved.

"Right in the beginning, that's our opportunity to really change the brain and change a child's future," she said. "You invest in early childhood, then you invest less in prisons."