Five months after federal stabilization grants expired, deeper cracks are beginning to show in the early care and education sector.
Without the historic level of operational funding that was distributed monthly to child care programs across the United States through September 2023, many providers are experiencing staff departures and shouldering rising costs, leading many to increase tuition for families and some to close classrooms — or worse, close their doors entirely.
Yet in Massachusetts, providers and programs have largely been insulated from the so-called child care cliff. Some are even flourishing.
Recognizing the disaster that lay ahead if stabilization grants expired without an adequate replacement, leaders in Massachusetts decided to continue funding operational grants for early care and education programs even after American Rescue Plan dollars dried up.
Through a state program called Commonwealth Cares for Children (C3), which was funded at $475 million for fiscal year 2024 and which the governor has recommended be renewed at the same level for fiscal year 2025, nearly 93 percent of licensed providers in the state are receiving monthly stipends.
Those dollars go a long way toward keeping programs open, staffed and sustainable, a number of providers in Massachusetts shared with EdSurge.
Survey data from fall 2023 — around the time that providers in other states began to feel the strain of stabilization funds disappearing — shows that the early care and education field in Massachusetts has rebounded. The licensed capacity of the state’s system now exceeds pre-pandemic levels, with around 237,000 child care slots total today, compared with 229,000 before COVID-19. The number of licensed providers, too, has recovered.
“What we’re seeing is exactly what we wanted to see,” says Amy Kershaw, commissioner of the Massachusetts Department of Early Education and Care (EEC), referring to the impact of the C3 grants, along with a number of other changes state leaders have made to support families and programs.
“We see more programs opening. We see programs being able to expand their capacity. We see staff salaries — which are still too low — going up,” Kershaw adds. “And we see many of those investments happening without the costs being passed on to parents, which is essential.”
At a time when the field is suffering, leaving families, educators and providers across the country scrambling, the progress in Massachusetts is remarkable. It is also, perhaps, a signal to other states that if they fund early care and education with fidelity, they too might see improvements.
Massachusetts is one of 11 states, plus Washington, D.C., that has significantly increased its investment in early care and education over the last two years, according to a report from The Century Foundation. But by giving money directly to providers to support their operations, Massachusetts sets itself apart, says Julie Kashen, senior fellow at the organization and one of the authors of the report, who calls the Bay State a “leader and a model for the country.”
“They took the lessons of the stabilization grants from the American Rescue Plan and continued that investment in such a way that, from the data I’ve seen, helps stave off the child care cliff and also grow the sector,” Kashen adds.
‘Game-Changing’ Operational Grants
Child care providers who work in home-based and center-based settings are able to use their C3 funds on costs such as payroll and benefits, professional development, supplies and curriculum, rent or mortgage payments, utilities, and facility upgrades.
Many providers are using the grants on salary increases for employees, in an effort to attract new staff and retain existing ones, according to survey data and interviews.
Heidi Kaufman, executive director of education at MetroWest YMCA, which has an early childhood program serving 140 toddlers and preschool-aged kids in a community about 20 miles west of Boston, says that nearly all of her C3 funding goes to boost staff compensation.
The MetroWest YMCA has received about $650,000 in C3 grants since July 1, Kaufman shares, including about $72,000 in February alone. It amounts to a little over 10 percent of her total revenue.
“The C3 grants have been a game changer for us,” she says. “ I don’t know how we’d be able to stay in operation without it.”
Between federal stabilization grants and now the state’s C3 grants, Kaufman has been able to pay her staff more competitive wages. Some of the lead teachers with bachelor’s degrees were earning about $21 an hour in January 2020 (about $44,000 a year) and are now making $28 an hour (about $58,000). Less experienced full-time teachers have seen similar pay bumps, from $17 an hour in 2020 to $24 today. Additionally, wages for part-time staff have increased 50 percent in the last four years, Kaufman adds.
“Typically, we’d been giving salary increases an average of 3 percent per year. For somebody to get up to a $7 increase over four years was unheard of,” Kaufman notes.
“We still don’t pay them anywhere close to what they’re worth,” she adds, but says that it feels good to be able to offer them raises — and to do so without asking more of the families.
A Multi-Pronged Approach
Gov. Maura Healey’s administration is focused on stabilizing, healing and transforming the early care and education field, in that order, according to Kershaw, the EEC commissioner.
“We’re in the heal/transform phase of our work,” Kershaw shares.
The recovery in Massachusetts was aided in large part by the American Rescue Plan and C3 grants, but not exclusively. The Healey administration has ushered in a number of other changes, from expanding universal preschool to signing an executive order for a “whole-of-government approach” to child care, calling on various state offices to collaborate with the business community to improve the field.
The state has come to recognize, Kershaw says, that “multiple levers are needed … to create the level of financial stability and health within the sector. It’s not a single stream that can really help the sector thrive.”
Notably, state leaders are changing the way the EEC department supports families and providers who participate in child care financial assistance.
For families, the governor has proposed expanding eligibility for financial assistance by increasing the income cap from 50 percent of the state median income to 85 percent. That would increase the cap considerably, from about $73,000 a year for a family of four to $124,000.
For providers, the state has made changes to its subsidy program, which now uses a formula that reflects the true cost of child care (versus a market-rate model) to calculate reimbursements. As a result, the state is now paying programs more for every child whose family participates in financial assistance. (Statewide, about 4,800 providers — or 56 percent of licensed programs — participate in the subsidy program, Kershaw says.)
In Western Massachusetts, reimbursement rates for an infant increased by 34 percent in February, from $72.37 a day to $97.18.
That has not only helped providers who already accept child care subsidies, but it’s actually made the subsidy program more attractive to providers who had previously only accepted private pay, says Kim Dion, assistant vice president and program director of Seven Hills Child Care Resources, a child care resource and referral agency serving Western and Central Massachusetts.
Each month, Seven Hills processes subsidy reimbursements for about 11,000 children in the region. Then Dion and her colleagues send checks to about 600 providers, totaling $12 million. They also help connect families in the area with child care that meets their needs.
“We are actively trying to remove families off of the statewide waitlist and offer financial assistance to them,” explains Marybeth Brown, assistant program director at Seven Hills. “To do that, we need [more providers] to accept vouchers.”
The state’s rate increases are certainly helping them with that effort, Brown says: “We’re seeing a huge uptick” in interest from providers.
Previously, maybe two or three providers in their area expressed interest in the subsidy program every week. But in January, Seven Hills had to cap one orientation meeting at 32 providers, and the week before that, at 35.
“The pieces are starting to come together now,” Brown says. “It all has to come together for it to work.”
Amy O'Leary, executive director of Strategies for Children, a policy and advocacy organization in Massachusetts, is encouraged by what’s happening in her state. So often, she says, leaders do not take the time to understand the nuances of early care and education, making it impossible for them to address the root causes of a broken system. Not this time. O’Leary says she has enormous gratitude for the state leaders who have spent time listening and learning. (O’Leary has facilitated some of that work through what she refers to as the “9:30 Call,” a series of conversations she’s held on weekday mornings since the start of the pandemic to connect educators, encourage advocacy and increase awareness about early care and education.)
“This idea of bedrock funding for the field … that was a dream,” O’Leary admits. “Now we’re like, ‘Oh, my god, we have it.’ Legislators understand it. Legislators are funding it, and they want to keep funding it.”
While the additional funding and positive changes have not solved the myriad challenges in the sector — costs are still too high for families, and wages are still too low for educators, she notes — it has allowed providers to move from a scarcity mindset to one of abundance, O’Leary explains.
“People can take a little bit of a deep breath and think about their operations, not in a panic mode,” O’Leary says. “It’s connected to respect and acknowledgment of a broken system. Instead of asking people to do more with less, in general, [the state is] asking them to do more with more.”
Brown, too, knows there is still much work ahead. This is just the beginning of a long road, she says. Still, there is an undeniable sense of energy and promise in Massachusetts right now.
“People who have been in the field for years now feel hopeful,” says Brown. “I feel hopeful.”
And if history serves as a guide, what starts in Massachusetts may soon take hold nationwide.
“We had the first public school in the country, the first public library,” Kershaw notes, “and we’re committed to leading on early education and care.”
