Child Care Costs are High and Going Up

Parents and the High Cost of Child Care: 2012 Report presents 2011 data reflecting what parents pay for full-time child care in America. It includes average fees for both child care centers and family child care homes. Information was collected through a survey conducted in January 2012 that asked for the average costs charged for child care for infants, 4-year-old children and school-age children in child care centers and in family child care homes in every state. The information was provided by State Child Care Resource and Referral (CCR&R) Network offices and local agencies that maintain data about child care programs in the communities they serve, or it was drawn from the most recent state market rate surveys.

Child Care Costs are High

* In 2011, the average annual cost of full-time child care for an infant in a center ranged from about $4,600 in Mississippi to nearly $15,000 in Massachusetts. * In 2011, the average annual cost of full-time child care for a 4-year-old in a center ranged from about $3,900 in Mississippi to nearly $11,700 in Massachusetts. * In 2011, the average annual cost of before- and/or after-school center-based care for a school-age child ranged from about $1,950 in Mississippi to nearly $11,000 in New York.

* In 2011, the average annual cost of care for an infant in a family child care home ranged from about $4,500 in South Carolina to nearly $10,400 in New York. * In 2011, the average annual cost of care for a 4-year-old in a family child care home ranged from about $4,100 in South Carolina to about $9,600 in New York. * The average annual cost for before-and/or after-school care in a family child care home for a school-age child in 2011 ranged from about $1,800 in Mississippi to just over $9,500 in New York.

Costs are High Compared to Family Income

* In 40 states and the District of Columbia, the average annual cost of center-based infant care exceeded 10 percent of the state’s median income for a two-parent family.

Costs are High Compared to Household Expenses

* Center-based child care fees for an infant exceeded annual median rent payments in 22 states and the District of Columbia.

* Center-based child care fees for two children (an infant and a 4-year-old) exceeded annual median rent payments in all 50 states and the District of Columbia. * Center-based child care fees for two children exceeded housing costs for homeowners with a mortgage in 20 states and the District of Columbia.

Child Care Costs are High Compared to College Costs

* In 35 states and the District of Columbia, the average annual cost for center-based care for an infant was higher than a year’s in-state tuition and related fees at a four-year public college. Even for 4-year-olds, the average annual cost of centerbased care was higher than public college tuition and fees in 19 states and the District of Columbia.

Least-Affordable States for Child Care

The report ranks the 10 least-affordable states for care in a center, based on the cost of child care as a percentage of the state median income for a two-parent family. The 10 least-affordable states for full-time infant care in a center in 2011 were New York, Minnesota, Oregon, Colorado, Hawaii, Kansas, California, Illinois, Massachusetts, Indiana and Wisconsin.

The least-affordable states for full-time care for a 4-year-old in a center in 2011 were New York, Minnesota, Wisconsin, Oregon, Vermont, Colorado, Kansas, Massachusetts, Indiana, Maine and Rhode Island.

Children Need Quality Child Care, Especially in Tough Economic Times

Even though experts say the recession is officially over, families are still feeling the lingering effects. The slow recovery makes paying for child care difficult for parents. CCR&R agencies report that some parents are removing their children from licensed programs to informal child care settings to better make ends meet. These options may be less expensive, but they are of unknown quality. There is no check for basic health and safety standards and other practices that promote healthy child development in child care settings that are not licensed.

The high cost of child care forces parents to make difficult decisions. Parents want quality child care for their children. Unfortunately, safety, health and school readiness comes at a cost that many parents cannot afford.

Child Care Financing Challenges

The cost of child care is largely borne by parents. Unlike the cost of higher education, there is no system of public financing to help make child care more affordable for families. The federal government provides grants to states through the Child Care and Development Block Grant (CCDBG). States use these funds to subsidize the monthly cost of child care for low-income families. About 1.7 million children receive assistance,1 about one out of every six eligible children.

About one-fifth of the children receiving assistance through CCDBG each month are in unregulated settings.3 In 10 states, the most recent data4 shows that 30 percent or more of the children who receive CCDBG assistance are in unlicensed care. In three states (Hawaii, Michigan and Oregon), more than half of the children receiving assistance are in unlicensed care.

The CCDBG law does not require the use of licensed care for families who receive assistance. The reality is that the quality of unlicensed care is unknown because unlicensed care is not required to meet licensing standards (e.g., basic health and safety standards, minimum training requirements for providers or background checks). Some states have minimum requirements for providers who receive taxpayer dollars to care for children, but those requirements are usually below licensing standards. Also, unlicensed care is not subject to regular inspections.

This means that public funds are being used to pay for low- or unknown quality child care settings for children.

States conduct market rate surveys to assess the cost of care within communities. Although states are required by law to conduct a market rate survey every other year, they are not required to use the survey to establish subsidy payment rates. This means that state-determined subsidy rates often do not reflect the current cost of child care in communities. At the same time that parents struggle to afford child care, studies show that the quality of care (despite the high cost) is mediocre in many communities. Most states have weak training requirements even though research shows that training is one of the most important indicators of quality.