WASHINGTON, D.C. – Today, during a hearing of the Senate Committee on Health, Education, Labor and Pensions (HELP), U.S. Senator Jacky Rosen (D-NV) questioned Dr. Myra Jones-Taylor, Chief Policy Officer at Zero to Three, and Ms. Khadija Lewis Khan, Executive Director at Beautiful Beginnings Child Care Center, on how COVID-19 has impacted the child care sector and strategies to strengthen the nation’s child care sector for working families. A transcript of the Senator’s full exchange can be found below, and a video of the Senator’s full exchange can be found here.
ROSEN: Thank you, Chair Murray and Ranking Member Burr. Thank you for holding this important hearing that affects so many and, of course, our most vulnerable, our children. And thank you to our witnesses for all that you do and for participating today.
I want to talk about nonprofit child care and SBA loans. We have been discussing today, and Senator Smith has just eloquently told us, millions of American families have difficulty affording child care. There’s shortages in availability and costs that are out of reach. It’s a growing problem that has been exacerbated by the pandemic. And, there are some child care providers at risk of permanent closure, we have to think creatively and urgently to help families across this country.
Currently, only for-profit child care providers have full access to all of the Small Business Administration’s loan products, while nonprofit providers only have access to the SBA’s Microloan Program — that’s capped at $50,000. This blocks access to capital for nonprofit child care providers to establish care facilities or even expand the ones they have. To address this problem, I introduced the Small Business Child Care Investment Act, bipartisan legislation that would allow qualified nonprofit small business child care providers access to the same SBA loans that can provide quality, affordable child care everywhere that they can.
So, Ms. Khan, as the Executive Director of a nonprofit child care center, can you talk about the financial challenges that are unique to nonprofits, please?
KHAN: Thank you, Senator Rosen, for the question, and thank you for supporting legislation that allows for more loans for child care centers, especially nonprofits.
I would say access to capital is a big problem with child care centers in general because the budgets are on such a small margin. A lot of traditional banks do not want to invest in child care, so we have to go to different financial institutions to get support. So, access to more loan products with the SBA would be helpful.
I think, in general, we need to make sure we’re also supporting the long-term strategy to make sure centers have the finances that they need to be able to operate in a way that makes sense.
I really appreciate all of the stimulus funds that have gone into child care, and I hope we can do something that is more permanent, so we have a permeant solution to our problems in early education.
ROSEN: I want to ask Dr. Jones-Taylor, can you also talk about what improving access to capital for nonprofit child care centers would do to assist with stability, upgrades to facilities, expansions, and what it really gives to the communities that they serve? How is it going to uplift the families that it’s going to serve right there where they live?
JONES-TAYLOR: Thank you for your question. We know that 53 percent of centers and 25 percent of family child care providers applied for the PPP loan. In a follow-up survey, just half of those who were surveyed, who applied, were actually approved because of what Ms. Khan said — the challenges with banking and the risks that banks saw.
This is very interesting to think about because we know that if you actually have a system that’s there in good times and bad, that is important for childcare.
As Senator Burr mentioned, K-12 was a system that stayed opened. Educators could receive their paychecks. We weren’t worried of the collapse of the public K-12 system because it is treated as a system.
We are in a real crisis where the true threat of collapse of child care is not some fantasy. It is truly something we are concerned about. So being able to stabilize the system and make sure we actually fund it so when we hit a crisis, it will be there afterward is absolutely critical. We need to shift the way we think about this and treat as a system and infrastructure it is.
ROSEN: Thank you, I know I don’t have much time left, so we’ll take this off the record. But, I just want to put a marker down. I’m worried about the mental health challenges for children. They have been rising because of the pandemic and compounds trauma for our foster children, our homeless children, and any children who have experienced violence in their own homes during the pandemic. So, we need to have trauma-informed training for our early childhood educators as well.
I know my time has expired, so I would be glad to take those off the record, but I just wanted to let you know that is coming. Thank you so much for everything you do.
I yield back Madam Chair.