Child care more expensive than college in many states

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NEW YORK (CNNMoney)
Child care costs continue to soar, with prices so high in some parts of the country that they exceed tuition at state colleges.

Last year, average center-based child care costs rose by nearly 3% nationwide, according to a report from the nonprofit Child Care Aware of America. Full-time care for an infant ranged from a high of $16,430 a year in Massachusetts to $4,863 in Mississippi. Meanwhile, center-based care for a four-year-old hit a high of $12,355 in Massachusetts and a low of $4,312 in Mississippi.

Why such huge price disparities? Blame it on differences in labor costs, state regulations and cost of living expenses, such as housing, food and utilities.

For example, Massachusetts has strict child care regulations that require one teacher for every three infants, compared to one teacher per five infants in Mississippi. Meanwhile, child care centers in New York City, among one of the most expensive places for child care in the country, pay significantly higher rents and also must meet strict state standards.

“In order to meet those (standards), it costs money,” said Jessica Klos Shapiro, public policy and communications coordinator at the nonprofit Early Care & Learning Council, which advocates for families across New York state.

The centers are also grappling with ballooning operational costs, ranging from rising insurance costs to higher food prices, said Lynette Fraga, Child Care Aware’s executive director.

As a result, child care costs grew by as much as eight times the rate of family incomes last year, the report said. And they continue to take a major chunk out of family budgets, often representing a household’s largest monthly expense.

Center-based infant care for one child was greater than median rent payments in nearly half of the states, while fees for two children (an infant and a four-year-old) exceeded rent in all 50 states. And in nearly two-thirds of the country, average child care costs were greater than yearly tuition and fees at a four-year public college.

To determine affordability, Child Care Aware compared average child care costs to the state’s median family income. Oregon was the least affordable state, with average care for an infant representing more than 18% of the median income for a married couple. New York, Minnesota, Massachusetts and Colorado rounded out the five least affordable states.

In recent years, Denver resident Liz Sagaser and her husband have spent as much as $1,400 a month on full-time child care for their two children.

Their 5-year-old daughter started public kindergarten this fall, and their 3-year-old son is in public preschool. But they still spend around $1,000 a month on education and child care, which takes up around 13% of their annual income.

“That’s a mortgage for a lot of people, and that’s just the child care costs,” she said. “That’s a huge portion of our living expenses.”

With nearly 11 million children under the age of five needing child care services and not enough government subsidies to go around, working parents are forced to make difficult choices, said Fraga. Many end up choosing cheaper non-licensed options, which don’t have to meet health and safety standards.

“The big question mark is: ‘Are children safe in unregulated care?'” she said, adding that federal budget and sequester cuts “threaten to make an already strained situation worse.”

 

Least affordable states for child care
State Avg. cost of center-based infant care Median income for married couple Percent of Income
Oregon $13,452 $72,226 18.60%
New York $14,939 $90,725 16.50%
Minnesota $13,876 $89,608 15.50%
Massachusetts $16,430 $109,090 15.10%
Colorado $12,736 $85,137 15.00%
California $12,068 $81,484 14.80%
Illinois $12,697 $85,715 14.80%
Hawaii $12,473 $86,699 14.40%
Washington $12,108 $84,464 14.30%
Kansas $10,518 $77,034 13.70%
Source: Child Care Aware of America

 

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