Early Childhood

Many Low-Income Families Struggle to Cover Child Care Costs, Study Finds

By Marva Hinton — November 03, 2017 3 min read
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A new report finds that child care is out of reach for many low-income families in the United States.

Researchers with the National Women’s Law Center (NWLC) looked at how all 50 states and the District of Columbia, which was counted as a state, administered child care assistance programs funded by the federal government.

The report notes that funding for these programs has declined since 2001.

Among the findings for 2017:

  • Five states—Florida, Massachusetts, Mississippi, North Carolina, and Texas—had more than 20,000 children on a waiting list for child care assistance.
  • Only two states, South Dakota and West Virginia, pay providers at the federally recommended level of the 75th percentile of current market rates. That’s down from 22 states in 2001.
  • A family of three with an income above $40,840, which is 200 percent of the federal poverty level, could not qualify for child care assistance in 36 states.

Karen Schulman is NWLC’s child care and early learning research director and the lead author of the report. She calls the findings discouraging.

“It’s surprising because it seems so obvious that this is an important support,” said Schulman. “It helps parents work, and it helps children have a nurturing environment [where] they can grow and learn. For that small investment, you can make such a difference to families, to our economy.”

The report looked at state’s policies this year in five key areas:

  • Income eligibility limits: as the report notes, whether or not a family qualifies for assistance depends not only on the state’s income limit in a given year, but also on whether or not the state adjusts the limit for inflation each year.
  • Waiting lists: in some cases, a family may stay on a waiting list for child care assistance for over a year.
  • Parent copayment levels: families are required to pay a portion of child care costs on a sliding fee scale based on income in most states, which can represent a financial hardship for some.
  • Provider payment rates: states set these rates, which determine if a provider can hire qualified workers, keep child-staff ratios low, and maintain facilities.
  • Eligibility policies for parents searching for work: allowing parents to have child care assistance while looking for work creates stability for families.

The 2017 results were compared to results from previous years. The information was gathered through surveys of state child care administrators. The surveys were sent out in the spring of 2017 and requested data for policies that were in place as of February 2017. Administrators were also asked to report any policy changes the state had made since February 2016 or were expected to make after February 2017.

The report did show some positives for families looking for help with child care. It found that families in four-fifths of the states had more access to child care assistance and/or saw the extent of assistance they could have received increased. It also noted that 2017 marked the fifth consecutive year in which conditions improved in the majority of states.

But Schulman suggests there’s still a lot of room for improvement. So what will it take to turn things around?

She said it has to start with more funding. Under the current system, she argues, that states are making terrible tradeoffs. “That means parents have to make terrible tradeoffs,” said Schulman.

She used the example of a state that may raise its income eligibility limits, which would make more families qualify, but then it would have less money to cover provider payments, which could lead to lower quality care.

“Child care assistance can be a tremendous benefit,” said Schulman. “It can really make a difference to their financial stability, to their children, but too many families can’t get it. We can address it. We know what to do. We just need the investment.”

Image by Getty

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A version of this news article first appeared in the Early Years blog.