Biden administration releasing $39B to help early childhood educators, child care providers

The Biden administration on Thursday announced it is releasing $39 billion in funding for the child care industry from the American Rescue Plan.

The administration said the funds are going to states, territories and tribes and are for addressing the child care crisis caused by the COVID-19 pandemic, which has lowered enrollment at child care facilities and caused some to close.

The funds will go to educators and providers to keep facilities’ doors open. Child care centers are largely small businesses and overwhelmingly owned by women and disproportionately owned by people of color, according to the White House.

The $39 billion is split into two funds, a $24 billion stabilization fund for providers and $15 billion in more flexible funding for states to send to families and workers. The Trump administration and Congress provided $15 billion in child care relief in previous COVID-19 relief packages last year.

“These providers have been on the front lines caring for the children of essential workers and support parents, especially mothers, who want to get back to work. These funds are a critical step to pave the way for a strong economic recovery and a more equitable future,” the White House announced.

The funding is expected to help provide safe and healthy learning environments for more than 5 million children and allow child care workers who have been laid off to return to work. With this funding, states can also provide direct subsidies to cover the cost of care to more than 800,000 families earning below 85 percent state of the median income and performing essential work.

The administration also touted that the American Rescue Plan includes an expansion of the Child and Dependent Care Tax Credit to allow families with children under 13 to receive as much as $8,000 toward child care expenses when filing their 2021 taxes.

The administration is expected to release guidance to states on these funds in the coming weeks. The funding will vary by the states’ population.

Texas will receive the most in the total funding at more than $4.4 billion, followed by California and Florida, which will receive more than $3.7 billion and $2.4 billion, respectively.