Explained: The $2 trillion CARES Act and your child care center

How the US relief package supports you and your team

Every one of us has had to adjust our budgets, routines and attitudes as the coronavirus continues to disrupt our idea of normal.

But for the child care sector, these disruptions are particularly severe. 30% of respondents in a recent survey of over 6,000 child care providers across the US said their center would not survive a closure of more than two weeks without significant financial support. Across the country, 49% of surveyed child care centers are losing income due to the coronavirus.

In an effort to relieve the economic pressure caused by the coronavirus crisis, the federal government has just passed the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act. The primary focus of the $2 trillion relief package is to provide support to employers and businesses, but it also offers financial support for individuals left unemployed or otherwise affected by the pandemic.

Thankfully, the CARES Act includes specific support for the child care sector, promising much-needed relief to you and your center during these trying times. I’ve put together a breakdown of these provisions and how you can access relief funds, sourced directly from the text of the CARES Act, with additional clarifications and resources from the First Five Years Fund.

Let’s get into it.

Child care business benefits

State-mandated closures present a major financial challenge to the child care sector. Here’s how the CARES Act can help your business stay afloat.

The act:

  • Allocates $350 billion for loans to small businesses – Accessible for business with less than 500 employees via the Small Business Administration. The US Chamber of Commerce notes, “These loans may be forgiven if borrowers maintain their payrolls during the crisis or restore their payrolls afterward.” You can learn more about these loans through this straightforward guide by the US Chamber of Commerce.
  • Grants $3.5 billion in additional funding to the Child Care Development Block Grant – This grant, applied through the Child Care and Development Fund, enables individual states to offer child care subsidies for low-income families. This funding boost supports child care assistance for essential personnel like nurses, supermarket employees and sanitary workers.
  • Grants $20 billion in additional funding to the State Fiscal Stabilization Fund – First introduced to support state budgets for K-12 and higher education following the 2008 financial crisis, the SFSF will again relieve funding shortfalls in state educational programs. Early childhood education programs and services may be eligible for support.
  • Grants $750 million in additional funding to the federal Head Start program – This funding is earmarked specifically to respond to the coronavirus-related needs of low income children and families across the country.
Personal benefits to you and your staff

Whether you’re a director or teacher, you’re likely already feeling the financial pressure of the pandemic. Here’s how the CARES Act supports you.

The act:

  • Expands eligibility for unemployment insurance – The Pandemic Unemployment Compensation program extends benefits to those put out of work by the coronavirus, and adds an additional $600 to weekly support checks until July 31st. To learn more about how you can receive support in your state, check out this thorough explainer by the Bipartisan Policy Center.
  • Supports those who have their working hours reduced due to the coronavirus – Administered and funded through state labor departments, the Short-Time Compensation program helps businesses keep employees on their payroll despite reduced hours. Currently, 27 states have established STC programs. You can find that list and learn more through the US Department of Labor.
  • Offers one-time support payments of $1,200 for every American – Married couples receive a joint payment of $2,400, and payment amounts increase by $500 for every child. Payments taper off for those with annual incomes above $75,000. Treasury Secretary Steve Mnuchin aims to send these checks out within three weeks, but NPR suggests that some may have to wait up to 20 weeks to receive their payments.
Financial support in your community

The relief measures within the CARE Act may depend on your state, as well as the size and status of your child care center. If you’re looking for additional support, you can look to local, community-driven coronavirus relief efforts.

The Giving Compass and the National Center for Family Philanthropy have put together a curated list of locally-based coronavirus relief funds to help connect you with the resources in your area. You can view these as a list, or access the map view to quickly find those nearest to you.

You can find this list of local relief funds here.

Do you have questions left unanswered? Explainer pieces or interviews you’d like to see?
Get in touch with me at ah@famly.co with your questions and I’ll do what I can to find the answers.

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