JOHN YANG: The federal government has been using COVID relief funds to support child care programs across the country.

But that funding is set to expire at the end of September.

Ali Rogin reports on how states are bracing for the looming crisis.

ALI ROGIN: Child care advocates are sounding the alarm and searching for solutions as federal funding gets closer to running out.

The price of child care has risen steadily in recent years with the average annual cost ranging from 4,000 to over $24,000 in some parts of the country.

When federal COVID era funding runs out in September, over 3 million children could lose access to childcare.

And more than 70,000 childcare centers could be forced to close, leaving families across the U.S.in limbo.

Susan Gale Perry is the CEO of Child Care Aware of America.

Susan, thank you so much for joining us.

This was an unprecedented amount of money that was put into the childcare system how have childcare programs been using this federal funding in the past years?

SUSAN GALE PERRY, CEO, Child Care Aware of America: Thank you so much for the question.

I always like to start with the good news.

And the good news is that the number of child care programs across the country has really rebounded to pre-pandemic levels.

And that is the direct result of a $50 billion investment that Congress made and pandemic childcare relief funds.

And, frankly, some incredible work on the part of state and federal partners to make sure that child care programs got that money when they needed it and how they needed it.

And many childcare programs, Ali, are using those funds to boost the wages of their childcare teachers to stabilize some of their back end costs when there were not children in care and they didn't have the parent fees coming in.

ALI ROGIN: I think it's important to establish just the importance of these programs, tell us about the services that these childcare and early education facilities provide to children.

SUSAN GALE PERRY: I love that question because I always think about childcare as a triple play.

So what we know about high quality childcare is first of all, that it really helps parents go to work and be on the job and focused on their job if their kids are in good quality childcare.

But we also know that when children are healthy, safe and learning in these childcare programs, we're going to benefit from that in their school readiness later in life, childcare benefits, all of us and our entire economy.

Because when parents can go to work and children are healthy and doing well, we all thrive.

ALI ROGIN: What are your main concerns for what happens to childcare facilities when this funding runs out?

SUSAN GALE PERRY: Yeah.

So what we're concerned about with the ending of these funds, which are going to be fully expanded in September, are a few things.

One is we certainly could see some constricted supply and that some childcare programs may close.

But we're also concerned a lot about the childcare workforce.

And whether childcare teachers who are who on average already only earned $13.50 an hour, we'll end up going to other places for work so that they can support their own families, then, of course, if there's not childcare teachers in the classroom, then we know that childcare programs can't stay open.

ALI ROGIN: And we know that some states have been taking measures to provide backstops for when this funding runs out or to try to keep it going from different sources.

Can you walk us through some solutions that individual states are finding to avoid this becoming a huge childcare cliff?

SUSAN GALE PERRY: Yes, we are seeing some bright spots across the country.

So states like Alabama and Nebraska and Minnesota are all making historic levels of investment in child care.

And they're investing in things like increasing wages for the child care workforce, and helping to boost fees for to support parents who are paying for child care and some other kinds of innovative projects to really increase the supply of childcare where families need it.

ALI ROGIN: And experts have long pointed to the childcare industry as one that was already a broken market well before the pandemic, well before these emergency funds were allocated.

So does the childcare industry require a more holistic overhaul?

What would that look like?

And how far beyond additional funding would that go?

SUSAN GALE PERRY: Well, I'm so glad that you asked that question.

Because as tremendous as these pandemic relief funds have been, the fact is, is that we had a broken childcare system before the pandemic.

And we are still scrambling within that same broken market.

And that's because it's a broken business model, essentially.

So, you know, childcare is a labor intensive business.

It takes a lot of people, who are well trained to be in classrooms of toddlers, 10 or 12 toddlers.

And that's expensive.

And right now in our country, we rely almost exclusively on parent fees to pay for that child care.

And we were pleased to see that the Senate has recommended increased level of childcare recognizing that it's going to take everybody to help really fix our broken childcare system.

ALI ROGIN: For families that might be watching who are worried about their own childcare, can you tell us about some of the resources that are available for families who might find themselves in jeopardy when this federal funding runs out?

SUSAN GALE PERRY: Absolutely.

Well, we always like to say that the first best place for parents to go is their local childcare resource and referral agency and they can find the names and numbers of those programs at childcareaware.org and Childcare Resource and Referral Agencies can help families both find childcare but also pay for childcare and direct them to other services that they may need.

ALI ROGIN: Susan Gale Perry, CEO of Child Care Aware, thank you so much for your time.

SUSAN GALE PERRY: Thank you so much.