The cost of child care is one of the top expenses faced by families in the United States. Often, parents find themselves in need of child care long before they are in a financial position and point in their careers where the significant expense fits easily in their monthly budget.
To better understand how parents make decisions about selecting child care and how to pay for it, Jump Start Finance (JSF) conducted a survey of nearly 500 parents with children under the age of 6. This white paper discusses some of the key findings from the survey, which was conducted in the Summer of 2020 during the Coronavirus pandemic, which likely was considered as part of the respondents’ answers.
While many families preferred what they consider the safest and most trusted option - providing at-home care themselves - most need to rely on some form of paid child care to support their ability to work.
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DATA SHOWS PANDEMIC EXACERBATES ONGOING STRESS RELATED TO CHILD CARE; FAMILIES LOOKING FOR OPTIONS NOW AND LONG-TERM
The survey, conducted in July 2020, clearly revealed the stark impact of COVID-19 on how families chose to - or were forced to - use child care. Nearly 65% of families responded that their use of child care was directly affected by the pandemic, with 1 out of 4 families reporting their care center either closed or they removed their child completely from care because of the pandemic.
Major news outlets are reporting the pandemic has increased instances of women leaving the workforce to care for children
Recently major national news outlets Bloomberg, The Wall Street Journal, CNN, The New York Times and more have published stories related to the long-term impact of a parent – specifically women – leaving the workforce to care for their children.
This storyline is not new, but the COVID-19 pandemic has led to a significant increase in families who have opted – many by force, not choice – to take children out of traditional environments they had been relying on for early education and care while they continued and grew their careers.
While many plan to return to their career when circumstances change, the historical data shows that in at least 50% of cases that doesn’t happen. And the vast majority of those are women.
This has always been an issue for parents, and particularly women who truly desire to continue their career and only leave out of perceived necessity. The choice can lead to a long-term negative impact on a family’s lifetime income. Of the roughly 50% of parents who do return to work full-time, they earn $700,000 less on average over their lives, and their starting wage upon returning is typically 10-25% below the salary/income level when they left employment.
This isn’t the only reason we created the KidVantage Loan specifically for child care, but it is a big one. The pandemic makes the option even more important for families. By lowering monthly payments by up to 60% and allowing families to pay over time, parents have the financial flexibility to choose the child care they want while continuing their careers. The long-term benefits to their careers, income, and children’s development are significant and undeniable.
FAMILIES STRUGGLING WITH THE MONTHLY COST OF CHILD CARE CAN NOW TAKE ADVANTAGE OF A LOAN PROGRAM CREATED TO PROVIDE FINANCIAL FLEXIBILITY AND MORE OPTIONS FOR CARE
Financial Services Industry Veterans Introduce Jump Start Finance and the KidVantage Loan Specifically for Child Care Cost, Deliver Significant Savings Over Credit Cards or Leaving Workforce
Founded to fill a critical and neglected need of financing the cost of child care and early childhood education for families, Jump Start Finance (JSF) has announced the formal rollout of their KidVantage loan program. The program follows the tried and true model of financing that has been available for decades for major life expenses like a home, auto, and college tuition.
KidVantage loans are currently offered throughout California and Colorado, delivering monthly payments directly to providers including child care facilities, home day care centers, preschools, nannies and more. Broad expansion of the program is scheduled for late 2020/early 2021.