How To Obtain Daycare Loans And Assistance

The price of daycare is increasing. For the past decade, the cost of childcare has steadily risen.

Parents are paying $284 weekly for daycare. The cost of family care centers increased by 80%. Many families need relief from these costs. Fortunately, there is financial aid available. 

Key Takeaways:

• Our team examines the costs of different types of childcare.

• There are various types of government assistance available for childcare funding. 

• Parents can use their tax credit each year to help pay for daycare.

• Parents can sometimes get childcare assistance from their employers if they are students.

• An installment loan can be a good option while you wait for other assistance.

Childcare Costs 

The type of childcare you need varies in price. Prices vary by state and cost of living, but the averages are around the same. It also depends on what type of childcare you use. Take a look at the cost breakdown below.

• Nanny: $736 per week

• Daycare: $285 per week

• Babysitter: $179 per week

• Family Care Center: $229 per week

The most expensive area for childcare is Washington, D.C., topping out at $885 per week. Arkansas has the cheapest childcare costs, which are $128 per week for daycare. No matter where you live, the costs add up.

Childcare Loans and Grants for Parents

If you need assistance finding funding for childcare, there are many options available to you.

Government Programs

Government grants for childcare can vary from state to state. You are encouraged to use your state's Department of Human Services to get a rough idea of what you are entitled to financially. Remember that some people will not be allowed to benefit from the state.

On the other hand, these people tend to work part-time or have substantial assets. With the former, it is generally expected that you can provide care for your child yourself. In the latter, it is assumed that you have the funds available to cover daycare anyway, and thus, you shouldn't need to pay out of your pocket for them.

Applying for government grants tends to be the same across states. This means that you will need to provide the following:

• Details of your income and working hours (the state of New Jersey, for instance, requires that you work at least 30 hours per week).

• Information about any assets that you may have, e.g., property.

• List the children and other people living in your household.

• Explain your current childcare costs

Based on this information, the government can provide details of how much help for child daycare assistance you can get. In general, if you don't have a lot of assets or work part-time, you should be able to get something to help pay for daycare.

Depending on your state, you may have restrictions on the daycare you can use. However, this is not the case for every state. Some will allow you to use whatever daycare you wish. But don't forget that you're responsible for extra costs beyond the grant you've received.

Work and School Programs

In some circumstances, it is possible to receive daycare assistance from your place of employment. Also, parents who are attending college may have access to resources to help them pay for childcare. Some of these resources are:

• Employer-sponsored Dependent Care Flexible Spending Account: Certain employers offer employees the option to allocate a portion of their earnings to a designated account known as a Dependent Care Flexible Spending Account, or "FSA," specifically designed to cover childcare expenses during work hours. The funds directed into a Dependent Care FSA are exempt from payroll taxes, resulting in reduced tax liabilities and increased take-home pay. It is essential to note that these funds are exclusively for dependent care, such as childcare services. To determine if your employer provides access to this program, consult your human resources department.

• Onsite childcare: Some employers offer daycare at their offices. Parents can easily check on their children anytime during their work day. It also saves parents money on transportation costs when picking up their children from daycare. 

• Daycare discounts: Check if your employer is partnered with local daycare centers. They may offer discounts to parents working there. 

• College daycares: In some cases, colleges will provide daycare on campuses. These could be free or greatly discounted. 

Your Child Care Tax Credit

Each year during tax time, if you have children, you will receive a tax credit for what you have already paid in child care. If you itemize your expenses during tax time, you can get money back from what you paid for daycare. Currently, you can claim $3,000 per child or $6,000 for more than two people. 

Getting A Loan

While you should always aim to get government assistance for child daycare, as with most things related to the government, the process can be lengthy.

• An online installment loan is very similar to a typical bank loan. With an installment loan, you borrow a sum of cash and pay it back in equal installments.

Installment loans may provide a more time-efficient solution, as government assistance can become time-consuming and may not be fast enough in economic emergencies. An installment loan may offer a quicker and more accessible option for securing funds in these situations.

Since you can get an installment loan in just a few hours (and get a decision even faster), you may see it as a way to pay for childcare, like if you have an emergency somewhere else or need to cover a few extra hours at work.

In Summary

Paying for daycare and other types of childcare gets expensive, but fortunately, various types of assistance are available to parents. From government assistance to installment loans, there are options to help parents pay for childcare. Find out which best serves your needs, and start the process today.