How Some States Are Using COVID Relief Funds to Support Child Care

New research from the National Association of School Boards of Education shows that federal COVID relief aid is being spent on compensation, mental health supports, and professional development for early childhood educators. 

The COVID-19 pandemic exacerbated existing challenges in early childhood education — namely a shortage of quality, safe institutions and industry professionals. In fact, according to ChildCare Aware of America, 9% of licensed child care centers closed between December 2019 and March 2021.

States around the county are utilizing federal COVID-19 relief aid to stabilize the industry. According to recent analysis of spending from the National Association of State Boards of Education (NASBE), states are using American Rescue Plan Act (ARPA) and Elementary and Secondary School Emergency Relief (ESSR) funds to “build up the early childhood education workforce through increased compensation, mental health supports, professional development and more.”

How states are using federal COVID aid to support the child care industry

K-12 Drive, a public education media and policy analysis site, summarized the NASBE findings:

  • Compensation and benefits: “States including Georgia, Illinois, Michigan, New Jersey, and New Mexico are using relief funds to give one-time bonuses of $750 to $1,500 to educators. Kentucky is using ESSER money to help child care providers increase hourly pay for workers.”
  • Mental health and well-being resources: “The Louisiana Department of Education is using $1 million in Governor’s Emergency Education Relief funding for a three-year initiative to provide all public school and child care educators access to free virtual teletherapy sessions. This initiative evolved after a survey revealed that nearly 40% of early childhood educators in Louisiana were showing signs of depression.”
  • Professional development: “In Utah, the State Board of Education, dedicated $12 million in ESSER money to establish the K-3 Early Professional Literacy Project. The project provides training for Utah’s K-3 teachers, administrators, literacy coaches and school psychologists in the science of literacy. The funding is targeted to high-need districts based on reading assessment performances.”

Where does Maryland stand?

While the NASBE report did not highlight Maryland’s efforts, the State has enacted substantial measures to stabilize the industry. During the 2022 legislative session, MACo supported a child care stabilization package (which ultimately became law) that included measures like:

  • Providing financial aid for existing licensed child care providers and grants to incentivize new providers to come into the market; and
  • Providing new hire and retention bonuses for child care providers and employees.

In total, the Maryland State Department of Education has administered two rounds of stabilization grants totaling $285 million of federal funding. Federal funds are now exhausted, however, on August 3, the State announced it was extending its the Child Care Stabilization Grant Program and adding $50 million in additional funds to provide additional relief to licensed child care providers. Applications for this third round of relief are now open.

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