At the recent Homelessness & Child Care webinar, many questions were raised from participants about child care subsidy, the financial support that qualifying families may receive for child care. The system is complex and there are many barriers for vulnerable families. Therefore we are dedicating this article to breaking down some of the complexity and help organizations make better referrals for this critical resource.

There are currently about 17,000 children waiting for child care subsidy across North Carolina. Many factors go into whether a county has a waiting list or not, and how quickly the waiting list can be moved. Following the discontinuation of ARPA funding which was not reestablished by the NC General Assembly, many areas of the state are quickly spending through their annual allocation.

The Benefits of High Quality Child Care

According to ChildTrends, access to high-quality child care not only improves a child’s future economic stability, academic success, and health, but also makes it easier for parents to pursue education and training and hold down a job, all of which are often precursors to securing stable housing. In real time, high-quality child care provides a stable environment that boosts a child’s development. Child care professionals who understand and can meet a child’s needs can make a profound difference in that child’s lifetime trajectory.

The definition of homelessness used to qualify a family for subsidy services comes from the McKinney-Vento Act. This defines a child as homeless if they lack a fixed, regular, and adequate nighttime residence. This includes students living in shelters, cars, parks, or public places; youth living in motels, campgrounds, or trailer parks due to lack of adequate alternatives; and children and youth sharing housing with others because of economic hardship or loss of housing.

Where Subsidy Funding Comes From

North Carolina uses a combination of state and federal funds to provide subsidized child care services to eligible families through a locally administered state-supervised voucher system. Each county sets aside 4% of their subsidy funding to serve vulnerable populations, including children and families experiencing homelessness or those who are in a temporary living situation. This set-aside also serves children with special needs.

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In addition, the North Carolina Partnership for Children (NCPC) mandates that no less than 30% of the state funds it distributes to each local Smart Start partnership goes toward child care subsidies. The local partnerships may set aside more than that and they have a few different ways that they can allocate these dollars: 1) integrated into the DSS subsidy dollars so that they simply expand this subsidy program; 2) partially integrated and partially as a separate scholarship program which can have different guidelines to fill gaps or address specific local needs; and 3) all can be set aside in a separate scholarship program. Rules and priorities for set aside Smart Start scholarship funds may differ by county and require families to apply to each of the two programs separately.

Families can get help paying for child care in other ways, such as tax credits, Head Start and Early Start, NC Pre-K, program discounts, scholarships, sliding fee scales, and employer assistance/flexible spending accounts. Child Care Resource & Referral (CCR&R) agencies can help families navigate these options. This remainder of this article focuses only on the NC child care subsidy program.

Where Does a Family Go to Find Help? To Apply?

Families can access the most current information about all possible support by contacting NC Child Care Resource and Referral or calling (888) 600-1685. They will be connected to their local CCR&R agency. Families may also apply for child care subsidies at the county Department of Social Services (DSS) or the agency that the county DSS has contracted to administer the subsidy program.

Eligibility for Child Care Subsidy

According to the Subsidized Child Care Assistance Program Policy Manual from the NC Division of Child Development and Early Education (DCDEE), families may be eligible to receive child care subsidy if:

• The parent or responsible adult is working
• The parent or responsible adult is attempting to find work and has a referral through the Work First Employment Services Program
• The parent or responsible adult is in school or in a job training program
• The child is receiving child protective services
• The child needs care to support child welfare services
• The child has developmental needs
• Other reasons as approved by the local Smart Start partnership if Smart Start funds are used

Homelessness is not an eligibility category and in North Carolina there is no waiver of these criteria based on homelessness. Therefore, even though qualifying families experiencing homelessness can be prioritized using the 4% set aside funds, these families will still be required to meet at least one “need for child care” requirement as listed above.

Financial Limits and Parent Fees

The following chart indicates Subsidized Child Care Assistance Program income limits based on the Federal Poverty Level, effective July 01, 2025.

View the complete chart that includes family sizes larger than 4 persons.

Most families are required to pay 10% of their income for child care costs. Families exempt from parent fees for the subsidy program include those involved with Child Protective Services, Child Welfare Services, and Foster Care. Families experiencing homelessness are not exempt from parent fees. In the US, for families experiencing homelessness, 22 states waive the parent co-pay. North Carolina does not.

Placement

CCR&Rs can help families find high quality child care that meets their needs and also provide information about what high quality care looks like. In most cases, families experiencing homelessness are given 30 days to provide the documentation for the application. It is interesting to note that 24 states allow 90 days or more. Here is the application that all families must complete for child care subsidy.

Even though families experiencing homelessness must be prioritized for child care placement and for subsidy in accordance with State regulations, if an appropriate opening is not available at a child care center, the family may be placed on a waiting list.

Challenges for Families

It is not difficult to imagine the challenges families experiencing homelessness encounter as they search for affordable child care, including:

• Lack of child care slots, accessible location or times

• Not all centers accept child care subsidy

• Waiting lists for subsidy support

• Challenges obtaining documents needed to enroll in early care programs

• Lack of flexibility in policies around “need for care” and required documentation families must provide for enrollment

• Transportation challenges to get to and from early care and education programs

• Lack of awareness among early care and education providers regarding the realities families experiencing homelessness face

• Misconceptions about who meets the definition of homeless, especially among families staying temporarily with others in “doubled up” situations

• Stigma and feelings of embarrassment or fear about disclosing their living situation

• Lack of understanding among family service providers of how to identify a qualifying situation and the legal requirements for prioritizing children experiencing homelessness

In Duke’s Margolis Center for Health Policy’s brief, Early Childhood Housing Instability and Homelessness in North Carolina, a mother described being dismissed from a shelter program for failing to meet their work requirement due to her inability to find child care: “…I wouldn’t get a job because I didn’t have child care. And I wouldn’t get child care because I couldn’t get a voucher for child care. It’s like this big circle.”

Challenges for the System

• In NC, only 14.35% of eligible children are receiving subsidized child care assistance. And yet, many counties have wait lists for subsidies due to insufficient funding.

• Staffing challenges at child care centers results in closing rooms or centers. Fewer child care slots mean longer waiting lists.

• Some centers may not feel they are prepared to support children with the complex needs of homelessness.

• Uncertain/changing living arrangements that cause children’s enrollments to be short or sporadic can negatively affect a child care center’s budget. Subsidy payments to centers are based on attendance.

• In North Carolina, providers are only reimbursed 59% of what it actually costs to care for an infant in a center-based program according to a First Five Years Fund 2024 report. This gap between actual and reimbursed costs makes subsidies financially unfeasible for many child care centers.

What You Can Do

High-quality early childhood programs, including licensed child care, are vital for children and families experiencing homelessness. These programs support healthy development and help mitigate the impact of instability. According to SchoolHouse Connection, this is also true for after-school and summer care for kids up to age 12.

Connecting with CCR&R (888-600-1685) is an ideal way to help a family access high quality child care, including subsidy and other possible financial resources in your community. Consider a personal and agency level commitment to sharing CCR&R contact information with all families who are struggling!

Additional funding is also needed to adequately address the needs of this vulnerable population of children. Consider reaching out to your representatives at the NC General Assembly to advocate for more child care subsidy and Smart Start dollars.

You do not have to be a child’s parent to give that child a positive experience.

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The first days of “Back to School 2025” were over a month ago, so children should be settling into the routine with the new schedules and new challenges that education brings. We want our kids to be challenged in their studies and on the athletic fields! Fitting into their social environments, learning from their failures, and all the work that goes into learning who they are in the world might be considered good challenges that make us strong adults. In any classroom in North Carolina, odds are that at least one student is facing or experiencing homelessness. Do you want to get a handle of the scope? Here is a national look that has North Carolina’s stats included.

SchoolHouse Connection 2025 Fact Sheet

Children and Youth Experiencing Homelessness in our Nation’s and North Carolina’s Schools

The Education for Homeless Children and Youth (EHCY) program, established under the McKinney-Vento Homeless Assistance Act in 1987, provides basic access to education for nearly 1.4 million children and youth experiencing homelessness.

SchoolHouse Connection provides information on student homelessness by state, county, local educational agency, U.S. Congressional district, or state legislative district, at https://schoolhouseconnection.org/article/data-profiles. This data report is based on SchoolHouse Connection research.

The EHCY Program is the only federal program dedicated to identifying homeless students and removing barriers to their school attendance and success. Without the protections provided by the McKinney-Vento Act, homeless students will struggle to attend any school, or benefit from any federal, state, or local education funding.

Public Schools Identified Nearly 1.4 Million Students Experiencing Homelessness in the 2022-2023 School Year

• Public schools identified 1,374,537 students experiencing homelessness in the 2022-2023 school year, a 14% increase from the previous school year, nearly making up for the drop in homeless student enrollment during school closures in the pandemic.  Many states are reporting even higher numbers for the 2023-2024 school year.
• The U.S. Department of Housing and Urban Development (HUD) reported a 39% increase in families staying in homeless shelters or visibly on the streets in 2024, which was the highest of any population and the second consecutive year of increase.
• In North Carolina, comparing the 20-21 to the 22-23 school years, the number of students experiencing homelessness increased from 22,682 to 33,243 – a 47% increase in 2 years.

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Homelessness Creates Unique Barriers to Education in Rural, Suburban, and Urban Communities

• Students experiencing homelessness face unique barriers beyond poverty, such as frequent school transfers, lack of transportation, lack of a fixed address for enrollment, and the stigma and fear of homelessness.
• Homelessness disrupts the lives of children and youth in rural, suburban, and urban communities, but is more hidden in rural and suburban communities. Schools are often the only source of support for homeless students in rural and suburban areas.
• Approximately 9% of homeless students are not in the physical custody of a parent or guardian. These students are often homeless as a result of abuse and neglect, but are not in the custody of child welfare agencies. They face additional educational barriers and are at high risk of trafficking and predation.

As a Result of These Unique Barriers, Homeless Students Have Higher Rates of Chronic Absence and Lower Graduation Rates Than Other Low-Income Students

• Nearly half (48%) of students experiencing homelessness in the 2021-2022 school year were chronically absent, a rate that is 12 percentage points higher than other low-income students, and 22 percentage points higher than all students.
• In North Carolina, 58.7 of the students experiencing homelessness were also chronically absent in 2021-2023.
• The 2022-2023 national average graduation rate for homeless students was 68%. This is 13 percentage points below other low-income students, and nearly 19 percentage points below all students.
• In North Carolina, for the 2021-2022 school year, the graduation rate for students experiencing homelessness was 86.4%, up from 69.3% the previous year.
• Youth without a high school diploma or GED are 4.5 times more likely to experience homelessness later in life, making lack of a high school diploma/GED the single greatest risk factor for experiencing homelessness as a young adult – and making education a critical prevention strategy.

When Barriers Are Removed, Homeless Students Can and Do Succeed in School, which is Their Best Protection Against Future Homelessness

• Some school districts and states are closing the gap between students experiencing homelessness and other students, demonstrating that with focused attention and resources, barriers can be overcome. In Henrico County Public Schools, Virginia, the proportion of homeless students experiencing chronic absenteeism dropped by 14 percent over the past two school years (2021-22 and 2022-23). Additionally, graduation rates for high school seniors receiving McKinney-Vento support rose to 93 percent in June 2024.
• With a long history of bipartisan support, the EHCY Program ensures that homeless students have the opportunity to succeed in school. It provides:

   

School Stability: Homeless students can continue attending the same school if it is in their best interest, even if their homelessness forces them to move. Transportation is provided to help maintain school stability.

School Access: If staying in the same school is not in their best interest, homeless students are immediately enrolled in a local school while school records are obtained, limiting educational disruption.

School Support: Every school district designates a local liaison to identify homeless students and provide support, including referrals to community agencies and training for school personnel. Funding is used for direct services to students and families.

The EHCY Program Plays a Critical Role During Disasters and Economic Downturns

• Events like hurricanes, wildfires, and floods can create lasting homelessness for families and youth. For example, public schools in North Carolina, Florida, and Georgia have identified over 5,100 newly homeless students as a result of Hurricanes Helene and Milton. The EHCY program has a proven track record of providing educational access and support to these students.
• During economic downturns and housing crises, homelessness often spikes. The EHCY program provides a safety net to ensure children and youth remain in school during these times of upheaval.

Recent Funding History

Here is the recent funding North Carolina has received from the Education for Homeless Children and Youth program (McKinney Vento funding).

2022: $3,410,230

2023: $3,545,887

2024: $3,533,359

2025: $3,737,041

• FY2024: Congress appropriated $129 million for the EHCY program, allowing about one in five (20.79%) school districts to receive dedicated funding.
• Unanimous, Bipartisan Amendment to American Rescue Plan (ARP) Act, 2021: An additional $800 million was dedicated to aid the identification and support of homeless students, which enabled over half of U.S. school districts to access EHCY support. An evaluation of early impact found improvements in identification, attendance, and achievement.

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