Maryland is looking to make cuts to its popular child care scholarship program that will likely cost working parents.

The number of kids receiving scholarships — essentially vouchers that help parents afford day care so they can go to work or school — nearly doubled in two years, costing the state far more than it was prepared to pay.

As they look for ways to plug a $3 billion hole in Maryland’s budget, lawmakers are now weighing two changes the education department wants to make to bring costs under control: limiting the number of children who can receive scholarships and reducing the portion of tuition they cover. Advocates warn that the changes could shutter child care businesses that primarily enroll scholarship recipients, and that parents may leave the workforce if they can’t pay.

The proposed changes will go into effect unless lawmakers act to stop them.

Del. Jared Solomon, a Democrat representing Montgomery County and father of two children under 5, said child care “is on a very short list of things we want to make sure we’re prioritizing investments in.”

“When you lose your child care, it’s a decision about, ‘Do you want to leave your child in a safe space, or do you want to go to work and pay for food on the table or a roof over your head?’” said Solomon, who has championed child care affordability legislation.

Here’s how the changes to the scholarship program could work.

A 40,000-kid limit

The state’s education department is giving out scholarships to over 41,000 kids, according to a Jan. 31 letter from State Superintendent of Schools Carey Wright. That accounts for just 14% of eligible kids, and the number is projected to grow to 45,000 children by May 1.

To cut the program down to size, the state education department is proposing not giving out any additional scholarships between May and September, allowing enrollment to fall to a projected 40,633 kids as they age out or their family’s income no longer qualifies.

Starting Sept. 1, the department would only hand out new scholarships to backfill spots vacated by kids who leave the program, capping it at 40,000 kids and saving hundreds of millions of dollars, “until the budget can support current enrollment without a deficit,” the letter said.

New families would be put on a waitlist. Those with the lowest income would get first priority.

That move will shut out some families who only became eligible for scholarships in the last few years, when the education department dramatically increased the amount of money a family could make and still qualify for subsidized child care. The decision, applauded by advocates, has partially driven the sharp uptick in scholarships.

Currently, families of four applying for the first time can qualify if they earn up to about $112,000 annually. That’s less than half of the $244,000 families need to afford infant child care in Maryland, according to analysis from the National Women’s Law Center.

Beth Morrow, the director of public policy for the Maryland Family Network, said a waitlist is concerning “especially for new families who might have the opportunity to start a new job or start a new training or school program” but can’t commit to it unless they can afford child care.

Flora Gee, the founder of Greenbelt Children’s Center in Prince George’s County, said the first time she dealt with a child care scholarship waitlist, she watched colleagues who relied completely on vouchers lose their businesses when parents couldn’t pay.

Gee is now in charge of teaching, learning and advocacy at the center, which enrolls around 60 kids — 90% of them on scholarship, she said. Many wouldn’t be able to afford full-time care out of pocket, Gee said.

It could be a problem even for parents with kids in public school who use the scholarship for before- and after-care or days school systems are closed but child care is open.

“That’s what they need because they’re working parents. They need the whole day,” Gee said. “Without the CCS [child care scholarship] wraparound funding, the parents are going to have a hard time paying for this.”

A growing gap

When eligible families receive a scholarship, the state reimburses their day care or preschool. Every few years, the state education department asks those businesses how much they’re charging in tuition to help determine its reimbursement rates, which vary by factors such as type of care, age group and geography.

The department is updating its numbers for the first time since 2021. Because costs and tuition rates have risen, child care providers are likely to see increased reimbursements in the short term, Solomon said.

But at the same time, the department has proposed covering a smaller portion of the tuition providers charge. When there’s a gap between what a scholarship covers and the actual cost of tuition, the difference gets paid by either the day care or the parent.

In the long term, that gap could grow as inflation drives up costs.

“If you cut provider reimbursement rates back, it makes it unstable for a provider to take a scholarship student,” Solomon said. “If you cut too deeply, providers start to say, ‘Thanks, but no thanks. We’re not going to serve these students anymore … because it doesn’t make fiscal sense for us.’”

Wright has said the education department will “ensure no provider sees a decrease in rates beginning in September 2025,” and that the reimbursement adjustment “strikes a balance between expanded accessibility and the ongoing viability of child care programs.”

But Morrow, whose organization is against reduced rates, shares Solomon’s concern that the change will cut down options and raise costs for families because reimbursements won’t keep pace with inflation.

“It brings us farther from what we know is the true cost of providing quality care,” Morrow said. “We’re not making any progress towards adequate compensation for this workforce.”

Gee from Greenbelt said her center would have to pass the cost on to families to cover rising expenses like staffing, insurance and food.

“We are so crushed. And we’re trying to hold everything together, we’re trying to hold onto our families and help them. But we cannot be the charity for the government,” Gee said. “We cannot pay the difference between what the voucher is and what the cost of care is or we will go out of business and we won’t be there for families.”

Parents like Glen Burnie mother-of-two Taiyana Bannister can’t afford to pick up the tab, either. She said she’d need to penny pinch if her 3-year-old daughter’s tuition at Greenbelt suddenly went up. Bannister currently pays less than half of what she’d owe without a scholarship, a cost she shoulders by bartending and doing Instacart on the side; her partner also works irregular hours at Amazon.

To free up more time for work, Bannister wants to get another scholarship for her 8-month-old son when her daughter starts pre-K in the fall, by which time it may be too late if the enrollment freeze happens. She’d also love to go back to school, where she was studying music entertainment until costs forced her to put her education on hold.

“It’s always been a dream of mine to have a job in the music industry,” Bannister said. “A big thing in me going back to school was I just felt like I can’t preach to my children in the future about going after their dreams if I haven’t done it myself.”

About the Education Hub

This reporting is part of The Banner’s Education Hub, community-funded journalism that provides parents with resources they need to make decisions about how their children learn. Read more.