New Hampshire Child Care Scholarships

25 Mar

Overview

The New Hampshire Child Care Scholarship Program provides financial assistance to eligible families for childcare expenses, enabling parents to work, seek employment, pursue education, or participate in treatment programs. In January 2024, the program expanded income eligibility to 85% of State Median Income and incorporated a sliding scale for family payments to expand access to more families.

Why It Matters

Childcare costs in New Hampshire create significant financial barriers for working families. In 2022, the average annual cost for infant center-based care exceeded $15,000, making high-quality childcare unaffordable for many families without assistance.

The Child Care Scholarship Program addresses this challenge by providing direct financial support to reduce the burden of childcare expenses. By limiting family payments to no more than 7% of household income, the program makes childcare more affordable for eligible families, allowing parents to work or go to school and improving family economic stability.

Following eligibility expansion in early 2024, program participation increased by 21.3% in the first half of the year, demonstrating the high demand for childcare assistance among New Hampshire families.

Quick Facts

Core Model: Income-based financial assistance for childcare costs
Notable Feature: Sliding-scale payment structure caps family payments at 7% of household income
Launch Date: Significant expansion implemented January 2024
Eligibility: Families earning up to 85% of State Median Income (approximately $89,180 annually for a family of three)
Current Funding: Supported through a combination of federal Child Care and Development Block Grant and state funds
Participation Rates:
- Children: 4,348 children enrolled as of October 2024
Program Coverage: Statewide availability across New Hampshire

Background

The New Hampshire Child Care Scholarship Program was established to provide financial assistance to low and moderate-income families, ensuring access to affordable childcare while enabling parents to work or further their education.

In January 2024, the state legislature expanded income eligibility limits to 85% of State Median Income and restructured the family payment model to reduce financial burdens on participating families. These changes aligned with the State Fiscal Years 2024-2025 budget priorities and have resulted in increased program participation.

How it Works

The program provides financial assistance through direct payments to qualified childcare providers on behalf of eligible families:

Eligible families apply through the New Hampshire Department of Health and Human Services
Family payment amounts are determined by family income: Families at or below 100% Federal Poverty Level (FPL) pay nothing, those between 100-138% FPL pay $5 weekly, and families earning more than 138% FPL pay 7% of their income
The state pays the remaining childcare costs directly to the provider

The program also increases payments to providers that accept scholarships, encouraging providers to participate in the program. This ensures that a diverse range of providers are available to parents, enabling them to choose childcare that fits their values and needs.

Key Features

Expanded Eligibility: Income limits increased to 85% of State Median Income, enabling more moderate-income families to qualify for assistance
Sliding Scale for Family Payments: Family contributions are limited to 7% of household income, meaning lower payments for families at lower income levels
Parent Choice: Families can select from licensed centers, licensed family homes, or approved license-exempt providers
Increased Provider Rates: The maximum provider payment rate was increased from the 55th percentile to the 75th percentile of the childcare market rate survey. Provider participation has improved, thereby increasing childcare options for families.

Policy Levers

Income Thresholds: Expanded eligibility to families earning up to 85% of State Median Income increases access for moderate-income households
Payment Structure: Family payments determined on a sliding-scale based on their income
Provider Payment Rates: Increased rates for providers accepting scholarships improves provider participation and thus increases childcare options for families to choose from
Funding Allocation: Combined federal CCDBG and state funds support program expansion and sustainability

Results

The New Hampshire Child Care Scholarship Program has demonstrated positive impact since its recent expansion:

Enrollment Growth: 21% increase in scholarship enrollment in the first half of 2024 following eligibility expansion
Current Participation: 4,348 children enrolled as of October 2024
Financial Impact on Families: Reduced childcare costs to no more than 7% of household income for eligible families, compared to potential costs exceeding 15% without assistance
Improved Access: Families earning up to $89,180 annually (for a family of three) are now eligible for assistance