Lack of Access to Child Care Subsidies Is a Barrier to Student-Parent Completion & Success

“I make too much to qualify for child care assistance but not enough to afford child care”– a student-father enrolled in a bridge program between a two-year and a four-year institution in Maryland.

Pursuing a higher education is unaffordable for many low-income students in the U.S., and the struggle to pay for college is intensified for many student parents, who often must pay for high-quality child care, on top of tuition, books, and basic needs, such as food and housing which together comprise what we call the student parent net price. To make matters worse, most student parents are unable to access child care subsidies that might help mitigate the financial burden of paying for child care.

In this follow-up blog to our report on student parent affordability, we examine how barriers of access to child care subsidies are exacerbating the financial pressures on student parents, many of whom juggle work and parenting responsibilities and live paycheck to paycheck while pursuing a higher education, sometimes at the expense of their own physical and mental well-being.

Child care is expensive. The estimated annual cost of child care in the U.S. exceeds $10,000, according to CNBC and the First Five Years Fund, an organization that works to sustain and expand the support for early learning at the federal level, while identifying and advancing new and innovative ways to increase access to high-quality early childhood education for children from low-income families. That cost has continued to climb amid the pandemic and thanks to a nationwide shortage of child care providers and inflation. Dual-income households now spend 15% or more of their pay, on average, on child care, while single-income households spend roughly 36%, on average, the same report notes.

The high price of child care makes the out-of-pocket cost of attending a public college 2 to 5 times higher for student parents than it is for their peers. For those with more than one child, the financial strain is even greater. That’s prohibitive for many student parents, who comprise more than one-fifth of all college students and are pursuing a higher education so they can build a better life for themselves and their children. These student parents are disproportionately single, people of color, from low-income backgrounds, and were already struggling to find and pay for high-quality child care before the pandemic reduced the availability of child care and drove costs up further.

Without affordable child care, many of them will have a hard time staying in school.

Sadly, the facts already bear that out: Student parents are far less likely to finish a college degree than their counterparts without children. A recent report by researchers at The Education Trust — “For Student Parents, The Biggest Hurdles to a Higher Education Are Costs and Finding Child Care” — shows that the lack of affordable child care is a major reason why. According to that report, there is no state in which a student parent can work 10 hours per week at the minimum wage and afford both tuition and child care at a public college or university. In fact, a student parent in a minimum-wage job would need to work 54 hours a week, on average, for 50 weeks just to cover the costs of tuition and center-based child care.

Expanding access to child care subsidies would help ease that financial burden and reduce the student parent affordability gap — which is the average amount that a student parent from a low-income background must pay annually to pursue a degree at a two- or four-year public college and cover the costs of child care, after grants, scholarships, and earnings from working 10 hours per week at the state minimum wage have been applied. It might also reduce the number of hours student parents must work to cover child care expenses and leave them more time for their academic studies — both of which would make them more likely to graduate.

Giving student parents access to high-quality child care at little or no cost would also be a boon for their children — in more ways than one. Research shows that having a safe and nurturing environment is essential to a child’s development. What’s more, students and student parents who obtain a bachelor’s degree have higher earnings and are more likely than those with only a high school diploma to achieve financial stability, which, in turn, is linked to higher educational attainment and more positive outcomes for their kids, according to a Georgia Budget & Policy Institute paper.

Sadly, the U.S. spends less than 0.5% of its gross domestic product (GDP) on early care and education — far less than many other countries — and the supply of child care providers and federally funded child care programs in the U.S. doesn’t come anywhere close to meeting the demand for high-quality child care.

Addressing these insufficiencies is vital. Fortunately, there are key things that federal, state, and higher education leaders and policymakers can do to help.

The Child Care and Development Block Grant (CCDBG) is the largest source of federal financial assistance for low-income families in need of child care but the program’s capacity has been dwarfed by the demand for affordable child care. While 17.4 million families were eligible for subsidies in fiscal year 2016, only 8% — or about 1.4 million children — received subsidies, due to inadequate funding and investment in the program. Head Start, a federal program designed to prepare children ages 3-5 for school is likewise underfunded and only serves about 11% of eligible families (See Figure 1), while Early Head Start, a federally funded program for infants and toddlers from low-income households, serves just 36% of eligible families with children ages 0-3. Unfortunately, families and parents of children under 3 who can’t access funds via Early Head Start have few options for high-quality child care, since infant and toddler care are significantly more expensive than care for older children and much harder to find.

The good news is that federal and state leaders are starting to recognize that child care is a must – not only for working parents, but to keep the economy running. The pandemic made the need for affordable and accessible child care apparent in ways they couldn’t ignore.

Yet, while Congress temporarily expanded the Child Tax Credit and sent some emergency financial stimulus to many families in the early days of the pandemic, those relief measures have expired, leaving student parents struggling once more to scrape up enough money to cover child care and college costs, which can top $10,000 a year, on average — not counting other costs of attendance, such as books and supplies and transportation, or food and housing.

Moreover, while federal funding for the CCAMPIS program — which awards state grants to support or establish campus-based child care programs that primarily serve the needs of low-income students enrolled in higher education institutions — increased in recent appropriations cycles, it remains inadequate: Combined federal spending on child care assistance rose 9% in FY 2019 from the previous year and there was a 6% increase in children receiving subsidies, but only 1 in 7 eligible children received subsidized care nationally.

Congressional leaders have a responsibility to make more resources available to parents, so they can afford high-quality child care. According to the Urban Institute, if child care subsidies were funded adequately, at least 800,000 more families who already meet their state’s eligibility rules would get subsidies. This would be a 73% increase in the number of families receiving subsidies in an average month.

Cost isn’t the only factor that determines whether student parents can access child care.

State policies are also a factor. Overly restrictive eligibility policies and complex application processes for subsidies can pose substantial barriers for student parents. While each state has their own application process, many require applicants to verify their income, employment, and school status, and report changes in their circumstances; and/or make an applicant’s eligibility conditional on employment or education status. Many states, for example, require parents to work a certain number of hours per week to be eligible for subsidies, even though such requirements make it tougher for student parents enrolled in college to qualify. Additionally, many states have exclusionary provider eligibility policies that exclude home-based caregivers in favor of licensed center-based programs and limit child care options, particularly for parents who need flexible or nonstandard care hours on account of variable school and work schedules.

Source: National Head Start Association “Head Start Applauds President’s FY 22 Proposal” (2021) and First Five Years Fund “Child Care and Development Block Grant”(2022).

Access to child care subsidies also varies greatly from state to state. According to data from the Center for Law and Social Policy, access to child care subsidies was lowest for families in Washington, DC, where the access rate is just 3%. New Mexico has the highest access rate at 15%, but that still leaves 85% of eligible families with young children unable to access subsidies.

Access to child care subsidies is low across the board but families of color and families with low incomes are disproportionately more likely to lack access to child care subsidies and high-quality child care and student parents are disproportionately people of color. Unfortunately, when student parents apply for assistance, there’s often a chance that they’ll be placed on a waiting list or turned away completely.

As state leaders assess their attainment goals and consider ways to support the progress of specific student populations toward degree completion and prioritize racial equity, they should be conscious of the barriers keeping student parents from accessing child care subsidies and work to remove them. Student parents shouldn’t have to choose between paying for high-quality child care and completing their postsecondary programs.

Here are additional recommendations from Ed Trust’s recent report for federal, state, and institutional leaders to consider:

Federal

• Require all Title IV institutions to collect data on student-parent status and mandate data reporting annually to the Integrated Postsecondary Education Data System (IPEDS).
• Raise funding for the Child Care Access Means Parents in Schools (CCAMPIS) program to $500 million dollars, which will build greater capacity for college campuses to provide more relief to student parents.

State

• Collect data on how many young children have parents who are pursuing a higher education, so state leaders and policymakers can understand and expand access to high-quality child care for them, especially those in Black and Latino families.

Higher Education Institutions

• Collect and report institutional-level data on student-parent enrollment, retention, completion, finances, and financial aid to the U.S. Department of Education via the Integrated Postsecondary Education Data System (IPEDS) surveys.
• Establish guidelines about who may be considered a student parent, including guardians and caregivers.
• Assist student parents in applying for child care subsidies.
• Adapt financial-aid policies to consider the full cost of college for student parents.