Child Care Rescue: How States are Using Their American Rescue Plan Act Child Care Funds

The COVID pandemic placed immense pressure on an already fragile child care system. Many child care programs were required to shut down—for at least some period of time—due to state health and safety mandates. Many programs served fewer children because parents were no longer working, were taking care of their own children while working from home, or were reluctant to bring their children to a group setting due to health concerns. Reduced enrollment combined with increased costs for health and safety measures and materials made child care providers’ already precarious financial situation even more so—and many child care programs were forced to close entirely. In a survey of more than 6,000 individuals working in child care centers and family child care homes conducted by the National Association for the Education of Young Children (NAEYC) in November 2020, 56 percent of child care centers reported that they were losing money every day they were open, and 81 percent of respondents from open programs reported they were serving fewer children than prior to the pandemic, with an average decline of nearly one-third.

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