'Child care cliff' could see 3.2 million kids lose child care access as federal funds set to expire

Federal funding for day cares ends on Sept. 30, and the so-called cliff is threatening millions of children and their families.

Elena Sheppard
·5 min read
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Children in cloakroom getting ready
Millions of children could lose their child care spots in the coming months. (Getty Images)

Up to 3.2 million children across the U.S. could lose access to their child care if Congress lets federal funding for child care run out this week.

Saturday, Sept. 30, is when $24 billion in pandemic-era stimulus funding for child care runs out. This would set off a "child care cliff" that would bring a ripple of consequences to the American people: millions of children could be out of day care programs, and up to 70,000 child care centers, roughly 1 in 3, could close nationwide.

Here's what you need to know.

What is the ‘child care cliff’?

The “child care cliff” is the term used to mark the end to funding from the American Rescue Plan Act, which passed in 2021 and allowed for tens of thousands of child care programs across the country to remain open and running through the COVID pandemic.

The child care industry has been operating on the brink of collapse since the start of the pandemic in 2020, when child care centers across the country shuttered, sending workers looking for new jobs. Many who stayed found themselves on the frontlines of a pandemic, being paid a paltry amount for the demanding work. Early child care educators in the U.S. are in the bottom 2% of earners, making a median $13.71 per hour. The $24 billion in federal aid reached more than 220,000 providers, allowing programs to cover basic costs like wages, benefits and program materials. The child care sector is still down hundreds of thousands of workers from pre-pandemic numbers.

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In five states — Arkansas, Utah, Montana, West Virginia and Virginia — and in Washington, D.C., the child care cliff could result in half of the licensed child care programs shutting down. In Wisconsin, 42 child care providers have already closed since June. In short, the pandemic funding was a Band-Aid, and the cliff is what happens when that Band-Aid gets ripped off.

I don’t have children. Why should I care?

The potential closing of tens of thousands of child care programs would cause repercussions across the country. As programs are forced to cut hours or close entirely, the decrease in child care possibilities would have a serious effect on working parents. Many parents will likely need to either decrease their hours or stop working entirely. As a result of this situation, the Century Foundation, a progressive think tank, estimates parents could lose $9 billion in earnings per year.

As is typically the case when it comes to questions of patching up child care holes, women will largely be the ones stepping out of the workforce to fill the gap. Women’s presence in today’s workforce, currently among the highest in history, will fall with it. “Losing child care will drastically impact this positive momentum,” Allison Robinson, founder and CEO of the Mom Project, an organization which helps women remain in the workforce, explained in an email to Yahoo News. “Many parents, moms being the most likely to be impacted, may have to choose between career and child care.”

Children play with a teacher at a daycare center
Once then funding runs out, tens of thousands of day care centers could close their doors across the U.S.

The cliff could cause an estimated 232,000 child care positions to disappear. As for day care facilities themselves, they’re expected to become more expensive for parents as supply dwindles. Child care costs in the U.S. are already some of the highest in the world, with parents paying, on average, $10,600 annually. There is also the reality that more than half of the U.S. population lives in what are known as “child care deserts” — areas where there are either no child care providers or three times more children than available child care slots. The end of funding is only going to exacerbate these already extreme conditions.

Does this have anything to do with the government shutdown?

Not directly, but a government shutdown would exacerbate the issue as policy and funding would be blocked from moving forward.

How are politicians trying to help?

Earlier this month, Sens. Patty Murray, a Washington state Democrat, and Bernie Sanders of Vermont, along with Democratic Rep. Katherine Clark of Massachusetts, introduced the Child Care Stabilization Act, which would provide $16 billion in mandatory funding every year for the next five years to the child care sector. The legislation has wide support from Democrats, but faces an uphill battle without Republican support.

What happens next

Quite soon after Sept. 30, child care facilities are projected to close. While it’s not clear which facilities would close or when, the Century Foundation built an interactive map to help Americans see what’s coming to their state. Studies show the majority of Americans support child care reform and while politicians fight, the pressure for change often comes from citizens calling senators and congresspeople to vote for legislation.

A few states — including New York, Minnesota and Vermont — are doing what they can to soften the fall off the cliff if the funding expires, but ultimately this is a system that needs an overhaul and there isn’t currently a workable plan for one. If added funding from the Child Care Stabilization Act is approved, which it likely won’t be, that would be a help. But it looks as if the government is backing away from a focus on child care and punting the responsibility to employers.

Many experts, including Robinson, agree with this idea, and think the involvement of both government and the private sector is what will be needed to make child care in America functional.