published : 2023-09-28

Three million children at risk of losing child care as federal funding expires

Over 70K child care programs face closure without funds from the American Rescue Plan

A photo of two children playing happily in a well-maintained child care center, taken with a Nikon D850.

Families across the country are bracing for the end of pandemic-era programs that, for many, are the only things keeping child care affordable.

Federal funding from President Biden's American Rescue Plan expires this Saturday — the end of fiscal year 2023.

One key area in which U.S. families could see the most immediate effect is child care.

According to research by the Century Foundation, the approaching end of the American Rescue Plan funding could affect the care of over 3 million children.

A close-up photo of President Biden signing the American Rescue Plan into law, taken with a Canon EOS R6.

More than 70,000 child care programs—one-third of those supported by American Rescue Plan stabilization funding—will likely close, and approximately 3.2 million children could lose their child care spots.

The loss in tax and business revenue will likely cost states $10.6 billion in economic activity per year.

The child care industry is in a uniquely compromised position following the yearslong pandemic.

While other sectors have bounced back, childcare services remain understaffed and prohibitively expensive for many families.

A group photo of child care workers and families holding signs that say 'Invest in Child Care', taken with a Sony A7III.

The reality is the child care industry was already suffering before the pandemic. It was already under-invested in. Many families could not afford child care. These dollars are set to expire if Congress doesn't act, putting many families in crisis.

In approximately 28 states, child care has become functionally more expensive for families than college tuition.

When the ARPA stabilization funds cease, child care will be starved of resources. The child care staffing shortage that preceded and continued through the pandemic will return with a vengeance, putting upward pressure on prices as child care businesses choose between raising wages to attract early educators—or going out of business.