Child Care Programs See Closures, Resignations and Tuition Hikes After Federal Funding Expires

In Fairmont, West Virginia, Helen Post-Brown owns and operates an early learning program licensed to serve 160 children. These days, due to staff shortages, she can only accommodate about half that many.

A dozen miles down the road, in Bridgeport, five of the 25 classrooms in Jennifer Trippett’s child care center sit dark and empty. Families in the community are desperately awaiting her call for a spot: More than 400 children are on the waitlist. But without teachers, she can’t take in more kids.

Another 120 miles south, in the town of Oak Hill, staff at Melissa Colagrosso’s early education program are reeling from pay cuts that went into effect in October. They aren’t sure how they’ll make their next car payment or cover their phone bill. They might need to apply for public assistance — and maybe a new job. Colagrosso wouldn’t blame them, she admits. She is already bracing herself for their resignations. If those come, she will have to consider closing classrooms and turning families away.

It’s been two months since the federal government’s $24 billion in child care stabilization grants expired, sending the sector over what many have come to refer to as the “child care cliff.”

“What’s happening in West Virginia is not an anomaly,” says Melissa Boteach, vice president of child care and income security at the National Women’s Law Center. “It is echoed by the experiences of child care providers and parents across the country.”

The relief, part of the 2021 American Rescue Plan Act, was intended to avoid a worst-case scenario for the early care and education field while the country rebounded from the pandemic. To some degree, it worked. For the most part, programs stayed open, providers were able to supplement the otherwise paltry wages of their teachers, and most families didn’t have to absorb huge tuition hikes.

“It was unbelievable,” says Post-Brown, owner and director of Sunbeam Early Learning Center. “I’ve never gotten money like that.”

Colagrosso, who owns A Place to Grow Children’s Center, said the relief was stabilizing. Both providers had been receiving monthly checks of $27,000 from the federal package. They are among nearly 1,600 child care providers in West Virginia — and 220,000 nationwide — who received stabilization grants, totaling $160 million invested in early care and education in the state. They used the money to invest in their programs and in the people — mostly women — who keep their programs afloat.

But the checks stopped coming on Sept. 30. Without another source of funding to supplement the sector, which the U.S. Secretary of the Treasury has called a “textbook example of a broken market,” the problems that the relief money helped paper over are once again pronounced.

In the weeks after the funding expired, 29 percent of families nationally reported that their child care tuition had increased, according to a survey from the RAPID Survey Project and the National Association for the Education of Young Children, and 28 percent of child care providers said they had reduced staff wages. Another quarter of providers reported that they were serving fewer children than when they’d been receiving stabilization funding.

“It makes sense,” says Boteach, “that when you take $24 billion out of a system that was already on the margins, you’re going to see child care providers left with impossible choices: raise prices for families already struggling to afford care, cut back on pay for early educators who already live on the brink of poverty, or close their doors altogether. When we don’t invest in care, there are no good choices.”

A Glimpse of What the Sector Could Be

In some ways, and in some states, federal relief money did more than avert — or defer — disaster. The infusion of cash into early care and education during the pandemic offered a glimpse of what the sector could be with a few policy changes and meaningful public investment.

When the pandemic began, West Virginia temporarily made all essential workers, regardless of their income, eligible to receive child care subsidies. The change put significant sums of money back in the pockets of middle-class families. In some households, it allowed a parent to enter the workforce for the first time in years, providers say. In others, it enabled parents whose paychecks had been going straight to child care to pay off student loans, to buy a more reliable vehicle, to have another child, even. “That was a jolly time,” Post-Brown recalls.

Early childhood educators — an almost entirely female group that is so severely underpaid they often, ironically, cannot afford to pay for child care themselves — were among those counted as essential workers in West Virginia. Many providers across the state saw former teachers who had left the workforce return under the rule change.

“It really did open up the doors,” says Trippett, owner of Cubby’s Child Care Center, the largest in the state. “I had several people with degrees in early childhood come back to work.”

Kids at Cubby's
Children at Cubby’s Child Care Center in Bridgeport, West Virginia. Photo courtesy of Cubby’s Child Care Center.

Using federal relief funds, the state was also able to provide subsidies to child care providers based on the number of children enrolled in their programs, rather than the number who showed up each day. It may sound like a subtle distinction, but in practice, attendance-based reimbursements can be the difference between surviving and sinking in this business, providers say.

Think of the attendance-based model like this: If a virus runs through a child care program and a dozen kids end up staying home for a week — a scenario Colagrosso just experienced last month — that’s about $500 less per day the program receives. Because the margins are already so slim, that one week could lead Colagrosso to delay or miss a rent or utility payment for the center. “The math doesn’t add up. It fluctuates too much,” Colagrosso explains.

The state had planned to revert back to attendance-based reimbursements in September, at the same time that the child care stabilization grants were set to expire. Instead, in April, the West Virginia Department of Health and Human Resources announced it would extend the enrollment-based subsidy reimbursements through August of 2024.

“If that had happened all at once,” Colagrosso says, “we would’ve fallen off the cliff and closed the doors.”

The essential worker exception, however, has ended, after being phased out over the last year. So those employees who came back to work for Trippett once their child care costs were covered? “They’ve left again,” she says; so have many of the moms who had re-entered the workforce.

Those two simple changes had a significant impact, Colagrosso notes. “It became so obvious,” she says, that by pumping more money into the system, “we were able to increase our quality. I saw what a difference it made in our community.”

Now that she’s seen it, she can’t unsee it. “We can’t go back to where we were before,” Colagrosso says.

To Stay Or Go?

When Colagrosso, who runs a large, nationally accredited center, began receiving $27,000 checks from the stabilization funding, she saw it as a rare opportunity to expand and renovate.

“We made all of these improvements, knowing this money was going to end,” she says. “We got out from under the disasters. We caught up.”

She put a new roof on the center, replaced the heating and air conditioning, and upgraded the outdoor play area.

She also gave her staff an extra $400 a month in wage supplements, realizing that there was no sense improving the facility for the long-term if they couldn’t staff their classrooms and stay solvent.

The wage supplements, plus an annual bonus given to child care workers by the state using American Rescue Plan funds in 2022 and 2023, changed the lives of some of the teachers at her center, Colagrosso says.

Teacher at A Place to Grow
A teacher at A Place to Grow Children’s Center pushes a child in a swing. Photo courtesy of A Place to Grow Children’s Center.

With money she set aside from her bigger paychecks and bonus payments, Destiny Vansickle was able to afford a down payment on a house in Oak Hill. The single mom of two moved out of an income-based apartment and bought a place of her own in just the past couple of months. The monthly pay bump allowed her to cover all of her bills, instead of picking which to pay and which to defer, she says.

The wage supplements ended on Sept. 30. All of Colagrosso’s employees, as a result, took a pay cut of $400 a month. For many, though they knew the funding was always supposed to be temporary, that first paycheck in October was sobering.

Tena Gee, another teacher at the center, admits that she had come to rely on that extra cash each month. After a while, she says, “you start to budget your life differently.”

“I was able to afford a car payment for the first time in my life. I’m 30 years old,” she says. “Now that that [money] is gone, I’m sitting here wondering how I’m going to afford it. What am I supposed to do?”

Vansickle is in the same boat. Now that her paycheck has been reduced, she can’t afford to furnish her house.

“Without that [$400 a month], I’m living paycheck to paycheck,” Vansickle says, adding that she struggles to afford groceries and diapers for her baby.

Gee, who has worked at A Place to Grow for 13 years and is also a single mother of two, is trying to figure out how to make it work with the extras stripped out of her paycheck. The labor force has changed, and she knows she can find a job that pays better and provides benefits.

“Looking for other jobs is on the table,” Gee acknowledges. “It’s horrible because my passion isn’t working at Sheetz (a convenience store chain in the area). My skill set isn’t going to benefit a grocery store. But they pay more.”

Vansickle, too, would like to find a way to stay. But eventually, she says, she may have to leave for a job that provides her family with more stability and security.

Parents Feel the Strain, Too

Colagrosso hasn’t lost any teachers yet, so she’s been able to keep her classrooms open. But she did increase her prices by 20 percent, effective Oct. 15.

It was necessary to offset the funds that disappeared, Colagrosso says. She gave families two weeks’ notice and hopes to “ease everyone into it” by not enforcing the tuition hikes until their child transitions to the next age group.

Ellie O’Keefe is among the parents who received the notice from A Place to Grow, which her toddler attends. She’s currently paying $155 a week for full-time care. Based on the center’s pricing model, she expected her costs to go down when her son turns 3 in a few months. Instead, her pay will go up to $170 a week when he transitions to the 3-year-old classroom.

O’Keefe will soon be paying as much for her 3-year-old as A Place to Grow was charging for infants, the most expensive age group in early education settings.

“I want my child to continue to have high-quality care, so as long as we are able to continue to afford it, we are going to continue to send him to a place we know and trust and that will give him the best learning experiences,” O’Keefe says. “But times are hard. We’re both working full time. We’re not struggling financially, but there’s a real financial burden when it comes to paying for child care.”

The burden is so great, O’Keefe adds, that it is central to her family’s conversations about whether to have a second child. “How could we afford both of these payments right now? Do we wait … so we’re only paying one child care rate at a time?” she wonders.

Data indicates that many other families are already feeling the strain, too.

Tens of thousands of Americans missed work in October, the first month without stabilization grants, due to child care problems, according to data released by the Bureau of Labor Statistics. About 92,000 Americans who typically work full time reported having to work part time for at least one week last month because of issues with their child care arrangements, compared to 55,000 Americans in September.

Those numbers should be a wakeup call to elected leaders, Boteach of the National Women’s Law Center says.

“It’s an economic imperative. It’s a moral imperative. But lawmakers should also see it as a political imperative: It’s affecting families’ bottom line,” she says.

The Biden administration has asked Congress to approve $16 billion in supplemental funding to support the early care and education sector. Short of that — which would be something of a miracle in the current political environment in Washington — providers and families are left to fend for themselves.

Many providers squirreled away portions of their monthly checks, anticipating the cliff that they knew would come this fall. Post-Brown, of Sunbeam Early Learning Center, says she was very careful with her money over the summer to give herself a bit of runway. But even that will only last so long.

“We are not operating in the black,” she says. “We’re operating in the red.”

Trippett, of Cubby’s, admits that she’s stopped planning too far into the future.

If she doesn’t lose any more of her teachers, she says, she’ll be OK for the next six months.

If she loses any more staff? “That’s my worst-case scenario.”

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