Indianapolis News and HeadlinesIndianapolis Local News


The end of pandemic era childcare funding could cause childcare facilities to close

In Indiana 3,270 childcare programs received these stabilization grants one in three programs said they would have close if they had not received that funding.
childcare funding.png
Posted at 7:34 PM, Sep 19, 2023
and last updated 2023-09-20 13:51:22-04

INDIANAPOLIS — Pandemic-era funding for childcare is set to end by the end of this month.

One study predicts over a thousand facilities could close across the state. In Indiana, 3,270 childcare programs received these stabilization grants. One in three programs said they would have closed if they had not received that funding.

Akira German-Beeman has been working in the childcare industry since 2004. She has two daycare's, one of which is 24 hours.

"We have a lot of nurses that drop off at 4:30-5:00 a.m.,” Akira German-Beeman the owner and operator of Totly Childcare Ministry and Rising Stars Childcaresaid. “We have people who are managing hotels and things like that where they work till 6 of 7 o'clock at night."

Screenshot 2023-09-19 194354.png

During the Covid-19 pandemic, several childcare facilities were on the verge of closing their doors. To stop that from happening Congress passed the American Rescue Plan, which provided stabilization grants to childcare facilities across the country, including Akira's facilities.
"When we received those grants, immediately I knew where they needed to go and that was to our staff members and you can tell the difference,” German-Beeman said. “We were able to operate with a lot less pressure."

But come September 30th, that funding dries up.

The Century Foundation did a study to see how that lack of funding would impact the childcare industry. They took data from the Department of Health and Human Services and paired it with survey data from 12,000 childcare providers across the country.

"What we found was really concerning,” Laura Valle-Gutierrez a Fellow with the Century Foundation said. “We found that nationally, 70,000 childcare programs could close. That translates to 3.2 million children losing their childcare spots. "

In theCentury Foundationsstate by state break down, it showed that over 3,000 facilities received stabilization grants in Indiana.

Screenshot 2023-09-19 194250.png

Once the funding is gone, the study predicts over 1,000 facilities in the state could close, that equates to over 48,000 kids losing their childcare.

Akira says her doors will remain open, but not all childcare providers are in as good of shape as she is financially. She says the profit margins in the childcare industry aren’t great. Which makes it hard for them to provide the benefits that other employers do.

"We still have the raises there because we have to compete out here in the workforce,” German-Beeman said. “Right now, as a childcare provider competing in this climate for employees is really tough."

Akira says she has already had to raise her prices and turns parents away because she isn't able to expand her services, due to the work force shortage. She is still able to provide paid time off for her employees but that isn’t the norm for most childcare providers. But having access to needed childcare is something that could impact the economy according to the Century Foundation.

"This also impacts employers bottom lines,” Valle-Gutierrez said. “So we found that Indiana employers will lose $131 million annually from lost productivity and child care disruptions. "

That's why German-Beeman hopes more incentives can be created for childcare providers soon. She says the childcare industry needs to come together to address the issues they are facing together. She mentions creating a substitute teacher pool, real-estate incentives for childcare employers and earn-to-learn programs that would attract more people to the field.

Screenshot 2023-09-19 194430.png

Until more option are available parents will be bearing the brunt of the shortage.

"When there is scarcity we do need to up the prices in a certain sense," German-Beeman said.

German-Beeman has created an online resource for childcare providers in Indianapolis where they can refer clients looking for care. You can find it by clicking here.

State Initiatives

The state of Indiana has been taking steps to address the lack of childcare in the state.

According to the Indiana Family and Social Services Administration, there have been grants for families and incentives created for employers to provide childcare. You can see the list of initiatives they say they are applying to address childcare issues below.

The Office of Early Childhood and Out-of-School Learning distributed about $543 million in federally-funded Stabilization Grants to 3,303 Indiana providers. Indiana continues to add providers, including about 50 new programs in the last year. Because of how OECOSL used its American Rescue Plan Act (ARPA) dollars, providers have not only been able to stay in business but grow. At FSSA – in partnership with Gov. Eric Holcomb, the Indiana Department of Education and the Early Learning Advisory Committee – several important initiatives have been made in the past year to increase the supply and sustainability of high-quality early education in Indiana, while also increasing affordability for families.

  • OECOSL has new CCDF reimbursement rates that reflect the actual cost of delivering care across care types and settings and were informed by the data provided by child care providers who received the federally-funded Stabilization Grants. []
  • FSSA, in partnership with IDOE, was awarded a $42 million federal grant that will be used over three years to implement changes that will improve Indiana’s capacity to recruit early educators, increase access to early learning opportunities for students in unserved areas and ultimately, support families as they make important decisions regarding their child’s education. []
  • Child Care Expansion Grants will provide $10 million to child care and early education providers to expand access to high-quality early education for Hoosier families. []
  • As part of its approval of Gov. Holcomb’s Next Level Agenda, the 2023 Indiana General Assembly increased eligibility for CCDF and On My Way Pre-K to 150% of the federal poverty line from 127%. (The new income level is $45,000 per year or less for a family of four.) This expansion will create access for approximately 11,000 more Hoosier children and families to receive assistance. The new income guidelines are now in place for families applying for CCDF and On My Way Pre-K. []
  • Also, as part of Gov. Holcomb’s Next Level Agenda, this fall, OECOSL will launch a new employer-sponsored child care initiative to provide incentives to Hoosier businesses to help expand child care for their employees.