For Providers: Guidance On Using The Child Care Funding Of The American Rescue Plan

COVID-19 blog series

In early March 2021, Congress passed the American Rescue Plan (ARP) Act which included, among many other things, $39B for child care, $15B in Child Care Development Block Grants and $24B in Child Care Stabilization Funds. In May, the Administration for Children and Families released federal guidance on how the Child Care Stabilization Funds can be used.  

Primarily, funds are to be allocated to qualified and eligible providers with a limited percentage set aside for administrative activities. Providers who have not previously participated in the subsidy system and who are an existing provider at the time of application are eligible to request funds. Providers are defined as center-based, group home, family- or relative-based providers serving subsidy-eligible children, non-relative in-home providers (at each state’s discretion), and school-age providers meeting requirements to be an eligible child care provider. Generally speaking, Head Start, Early Head Start, and public pre-kindergarten programs are not eligible as they are receiving funding through other parts of the ARP.  

Funds can be used to cover personnel, rent/utilities/facilities, insurance, personal protective equipment (PPE), equipment necessary to respond to COVID-19, mental health services, reimbursements for past expenditures related to COVID-19, and other goods and services necessary to operate a child care program. Individual providers will apply via a process identified by each state.  

Administrative funds can be used for administrative activities, but also may be used for start-up grants and technical assistance. Decisions on use of these administrative funds will be made by each state’s lead agency. 

South Carolina will receive $436M in Child Care Stabilization Funds and $273M in Child Care Development Block Grants. In South Carolina, the lead agency is the SC Department of Social Services, Division of Early Care and Education.  

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