Key Highlights
- South Carolina paused new applications for childcare scholarships due to a major funding shortfall.
- The state is limiting who can apply or renew while keeping benefits for those already enrolled in year-long scholarships.
- DSS officials say the situation is the result of a “perfect storm” including high demand, rising prices, and the loss of federal ARPA funds.
- Advocates are calling for both short- and long-term solutions to stabilize the childcare system in South Carolina.
The Current State of Childcare Scholarships in South Carolina
Earlier this month, a significant change swept through South Carolina’s childcare landscape when officials paused applications and renewals for many new scholarships. This move stems from a pressing issue: funding shortages that have left the state grappling with how to support families in need.
A Funding Crisis
The decision by the State Department of Social Services (DSS) to pause new childcare scholarship applications was due to a major shortfall in federal funds. According to Connelly-Anne Ragley, DSS’s Chief External Affairs Officer, much of that support came from the American Rescue Plan Act (ARPA), which expired in September 2024. “The one-time funds the agency received in response to COVID-19 through ARPA were over $954 million specifically for childcare,” Ragley explained. “Those funds are gone.” This funding gap has led to a critical pause, affecting thousands of families across the state.
Impact on Families and Economy
The impact of this pause is already visible in the numbers. Statewide, DSS serves more than 24,000 children with childcare scholarships, spending between $20-24 million per month. These numbers are substantial, but they represent a fraction of what was available during the ARPA era.
The state has fully liquidated over $954 million in COVID-era funds, leaving many families uncertain about their future support.
For working parents and the broader economy, this uncertainty is particularly concerning. Janet Bates, co-facilitator of the Charleston Chapter of the Chamber of Mothers, emphasizes the importance of childcare as a “mission-readiness issue.” She argues that people cannot be effective at work if they are worried about their family’s well-being. “We need to think about our economy in South Carolina and childcare as a mission-readiness issue,” Bates said.
Short-Term vs Long-Term Solutions
In response to this crisis, advocates like Bates are calling for both immediate and long-term solutions. Short-term measures include S.47, a proposed childcare tax credit bill aimed at increasing incentives for businesses that provide childcare services. This bill is seen as a way to help working parents and stabilize the local economy quickly.
Long-term, however, South Carolina needs a permanent, statewide childcare fund to ensure stability.
Bates believes this is crucial not just for families but for the state’s overall economic health. “Childcare is everyone’s problem,” she stated. “There are people out there working toward solutions in advocacy organizations. And we’re here. We want your stories; we see you.” This perspective underscores the broader implications of the funding shortfall and its potential to affect not just families but the entire labor market.
For now, while the pause on new applications is in place, children in protected categories—such as those in foster care or experiencing homelessness—are still eligible to apply for scholarships. But this is a temporary solution at best, given the ongoing economic challenges facing South Carolina’s childcare sector.