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How the end of ARPA funding for childcare centers could impact local families

As October 1, 2023, approaches, a cloud of uncertainty hangs over childcare centers across the United States. Federal funding for childcare that was established through the American Rescue Plan Act is set to expire, leaving parents and providers grappling with the consequences.

Children play with rocking animals

It is estimated that more than three-million children could lose access to early childhood education programs across the country.


In 2021, President Joe Biden signed a $1.9 trillion stimulus plan that appropriated nearly $40 billion in ARPA funding so that childcare centers could stay open despite economic uncertainty throughout the COVID-19 pandemic. The funding helped childcare centers pay their staff, maintain their facilities, and keep costs manageable for families.


According to the Department of Health and Human Services, the investments assisted 220,000 childcare providers, saved more than nine-million childcare slots, and more than a million childcare job positions. The relief is set to expire on September 30, 2023, when the government’s fiscal year 2023 ends.


“Federal childcare funding has been a critical pillar of support for families across the nation for years,” Antoinette Hawthorne, Step Forward's Early Childhood Education Service Manager, said. “It has helped maintain the affordability and accessibility of childcare services, ensuring that working parents can pursue their careers while providing a safe and nurturing environment for their children. Without this financial assistance, many families will be unable to secure reliable childcare options.”

A child looks out the window

Childcare centers have long been the backbone of support for working parents, but families have found it to be increasingly difficult to pay for childcare. According to Care.com, the average cost of childcare is $15,000 per year for one child. That is a more than 50-percent increase from one decade prior. Despite that, childcare workers earn an average of $24,000 per year.


“A career in early education and childcare is driven by passion, but passion doesn’t pay the bills,” one childcare worker stressed.


Now that the ARPA funding is set to expire, many worry that childcare centers will struggle to pay staff, cover overhead costs and maintain the quality of care. They may be forced to reduce their services or close down altogether. Some will not be able to pay their staff, which will in turn mean those individuals leaving for other industries. If children do not have a place to go, parents may need to make the difficult decision to leave the workforce and instead, stay home.

Many economists and a few people in Washington D.C. have referred to the issue as a market failure.


“Childcare isn’t just a family issue, it’s an economic imperative,” Hawthorne explained. “The availability and affordability of childcare services directly impact a nation’s workforce participation, productivity and growth. Investing in childcare is an investment in our future prosperity.”


A child looks at the camera

Step Forward’s Head Start operations will not be impacted by the ARPA funding coming to an end, although the agency is monitoring the market closely to see what happens with childcare centers throughout Cuyahoga County. It’s possible that if childcare centers in Greater Cleveland close, if families are income-eligible, that Head Start may see an increase in enrollment. The program enrolls children for Head Start year-round. The agency is also prepared to welcome childcare workers if they are in need of a job.


“To the childcare workers who are facing uncertain times, if your center closes, there is a place for your dedication and expertise at Head Start. We welcome you to continue your vital work with us, nurturing the future generation of leaders and learners,” Hawthorne said.


Step Forward Head Start is hiring!

The agency is offering a sign-on bonus of $1,000 for full-time employees and $500 for part-time employees.

Positions include teachers, family service workers, nutrition aides and more. Step Forward Head Start is looking for education staff passionate about preparing young students for the future and helping them develop a love for learning early. Take a step toward a new fulfilling career today! Learn more and apply to open positions here.

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