Child Care Assistance Spending & Participation in 2020

By Alejandra Londono Gomez and Alyssa Fortner

Child care has long been unaffordable and inaccessible for many families. The Child Care Development Fund (CCDF), the primary federal funding source to help families with low incomes access child care, is a crucial support for many families across the country. However, Congress has never funded child care at the level needed to serve all eligible families. In fact, the most recent data from the Assistant Secretary for Planning and Evaluation (ASPE) show that in 2019, only 1 in 6 eligible children had access to assistance.

This annual brief analyzes national and state spending and participation data for CCDF- and TANF-funded child care for FY2020. It also highlights data on participation in the program, including children served and the number of providers who accept children funded through CCDF. Some key findings include:

  1. With COVID-19 relief resources, the total combined child care spending in FY2020 was $16.4 billion, a 23 percent increase from FY2019.
  2. Nearly 1.5 million children received subsidies for child care in FY2020, a 4 percent increase from FY2019.
  3. An all-time low of 231,723 providers accepted children with CCDF subsidies in FY2020, a 5 percent decrease from FY2019.

Because of the delay in data publication, these data are only beginning to show the impacts of the COVID-19 pandemic on child care. FY2020 began on October 1, 2019, and ended on September 30, 2020. As the pandemic began to affect the child care sector in March 2020, these data only reflect the first six months of the pandemic. The report also includes spending from the CARES Act, including its impact on state expenditures and children served because of the pandemic. However, the report does not reflect the significant COVID-relief funding for child care assistance in the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 and American Rescue Plan Act spending packages that were passed after the end of FY2020.

The pandemic highlighted the existing vulnerabilities and disparities in the child care system. It underscored the importance of affordable, accessible child care not just for families and children, but for the economy as a whole. The pandemic also exacerbated longstanding systemic issues, including decades of insufficient federal investments, which impact access, affordability, and child care workers’ wages. Even before the devastating harm of the pandemic, most families experienced barriers to accessing high-quality care that could fully meet their needs. Those who could find child care struggled to afford the high costs. The detrimental impacts of the pandemic have caused policymakers, business leaders, and the public to better recognize the child care industry’s critical role in the economic stability of families and society.

While the data in this report begin to paint the early picture of the pandemic’s impact, we have much more to learn as data from 2021 and beyond are made publicly available. With that information, we will be able to understand the full impact the pandemic had on the CCDF program, children’s access, and providers’ ability to continue to stay in the program. The data from this analysis show increases in both funding and participation for children, but it is important to understand that without additional investments these positive gains will only be temporary.

Read the full brief here.

Read our work on how states are utilizing the COVID-19 relief funding here.