How much does child care cost in 2021?

The pandemic has changed the child care industry forever. This industry was already vulnerable before the pandemic and ...


The pandemic has changed the child care industry forever. This industry was already vulnerable before the pandemic and costs were already soaring. However, the aftermath of the crisis has caused many childcare facilities to close due to health risks. Now, many providers are dealing with issues of job insecurity.

Despite all the difficulties that have arisen due to the pandemic, things are starting to move in the right direction! Vaccination programs continue to roll out, and more people are returning to work in a physical sense.

As a result, childcare facilities are reopening their doors to accommodate working parents. With so many changes since the pandemic, one of the most critical changes is child care cost. Reduced staff numbers and decreased budgets, particularly from state-run facilities, drive up the costs for parents. So, how much can parents realistically expect to pay for childcare costs in 2021?

The Cost of Childcare Before the Pandemic

Childcare facilities have always struggled to balance providing a developmentally appropriate curriculum for small children and budgets before the pandemic. A study in Indiana on childcare costs conducted by Lending Tree revealed that parents were paying on average $ $9,977 per year in childcare costs. This accounted for approximately 20 percent of parents' income.

Other states in this study ranged anywhere from $6,000 to $15,000 per year, with Massachusetts and Washington D.C. being among the most expensive. A considerable part of this expense primarily went to sustaining qualified staff members. The cost to keep staff became even more substantial during the pandemic when fear from the crisis caused staff at many facilities to leave. Low pay and fear of the Covid-19 disease were significant determining factors for many staff members to resign.

How Much Can Parents Expect to Pay for Childcare Post-Pandemic

During the pandemic, the same study by Lending Tree claims that costs of daycare in places like Massachusetts and Washington D.C. only rose by about 8 percent. However, in places like Georgia, Louisiana, and Florida, which had been on the low end of the spectrum before the pandemic, increased over 100 percent. This primarily affected childcare costs associated with children aged 3 to 4 in center-based facilities.

According to statistics gathered by Care, half the parents in a recent cost survey revealed that they expect to pay over $10,000 in 2021 for childcare. Some families are finding childcare increasingly challenging to find and are turning to nanny services for care. Compared to a childcare center, this is a much pricier option – almost double what parents pay for center-based care. However, in some cases, this is the only viable option.

What Programs Exist to Help with Childcare Costs

In response to the rising costs of childcare, the government provides subsidies and programs to help offset some of these costs. Below are nine subsidies available to parents to help with childcare costs:

  • State Assistance
  • Military Family Assistance
  • Child and Dependent Care Tax Credit
  • Child Tax Credit
  • Dependent Care Accounts
  • Childcare Network Programs
  • School Sponsored Subsidies
  • Sliding Fee Scales
  • Sibling Discounts

Though childcare costs don't seem to be lowering anytime soon, these programs are available to ease the crunch most parents are feeling. The federal government is offering a bulk of childcare aid through state programs which vary state-by-state. Another form of substantial relief is available in the form of tax relief.  

How Childcare Facilities are Working to Keep Costs Low for Parents

Part of the reason why childcare costs soared during the pandemic is because providers struggled with issues of maintaining staff and low enrollments. In April 2021, President Joe Biden released $40 billion in funding to help providers with the childcare crisis. This economic boost is meant to help providers devastated by the crises to reopen, hire staff and make childcare affordable to low-income families. Fifteen billion was pegged specifically for the Child Care and Development Block Grant to provide federal help for low-income families to afford childcare costs.

In summary, the pandemic has taken a devastating toll on families as it relates to childcare costs. Working families have seen massive increases in the annual expenses in many areas of the country, sometimes double what they paid before the pandemic. Despite these setbacks, many state and federal programs are meeting this challenge. Some of these programs provide immediate relief, while others offer relief during tax filing season.

Interested in streamlining your childcare costs? We can help. Learn more today!

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