Child Care Licensing Incentive

The Need

Colorado families are facing a shortage of licensed child care providers as the state emerges from the COVID-19 Public Health Emergency. This is especially true for families seeking infant and toddler care. Through licensing and qualified exempt status, child care providers receive access to a wide range of state and local resources for providing the highest quality support for children and families in their care. Incentivizing child care providers to become licensed or Qualified Exempt helps CDEC and other agencies monitor and support the industry statewide. A complicating factor is the reality of low wages for early childhood educators (currently being researched through the Teacher Salary Increase pilot).

The Strategy

High-quality child care is essential for children’s long-term academic and personal success. CDEC regularly monitors licensed child care programs to ensure the health, safety and well-being of children in their care. All licensed providers and their staff meet educational and experience requirements, are cleared through background checks and participate in training on key safety topics.

Through this activity, CDEC used American Rescue Plan (ARP) funds to provide a one-time bonus to unlicensed providers who become newly licensed or Colorado Child Care Assistance Program (CCCAP) Qualified Exempt. The goal of the licensing incentive is to increase the number of licensed child care providers in the state and to increase families' access to safe, high-quality child care.

Licensed providers received a $5,000 bonus incentive and CCCAP Qualified Exempt received a $500 bonus. Along with the licensing incentive, many providers were encouraged to apply for the Emerging and Expanding grant. 

CDEC is leveraging relationships with trusted partners for recruitment and communication strategies, including the Early Childhood Council Leadership Alliance, early childhood councils, family child care home navigators, Colorado Statewide Parent Coalition, licensing specialists and Metrix. Licensing Specialists are geographically assigned and work with local early childhood councils and family child care home navigators to ensure providers are supported through the licensing process. 

Key Outcomes and Learnings


This strategy was one of the most effective ways of increasing infant toddler slots. With the assistance of these bonuses, CDEC has been able to license 397 new programs, creating 17,926 new child care slots. 4,200 of these slots were dedicated to infants and toddlers. 

  • A total of $2,789,500 was awarded.
  • 536 providers became licensed through this program.
  • Family child care home providers accounted for 40% of the new providers eligible for the bonus. 


There are numerous costs associated with opening a licensed child care business, including but not limited to obtaining background checks, completing required training or education, and purchasing child-appropriate equipment and materials, this bonus significantly reduced the financial barriers allowing more child care providers to be licensed. 

It took the effort of multiple support roles (licensing specialists, navigators, vendor support) to reach eligible providers to engage in this incentive. 

Family, friend and neighbor (FFN) care providers who were operating as of March 1, 2021, were also eligible for the Child Care Stabilization Grant.

green gear labeled access and quality


Amount: $2,643,500 

Source: American Rescue Plan Discretionary 

Expiration: July 31, 2023

Next Steps

A survey is in the works to determine how well the program was administered and how programs benefited from the grant.

Additional grants opened for new applicants on March 15, 2024, and close on April 12, 2024.


colorado map depicting counties with a provider approved to receive licensing bonus
This map shows counties who had at least one provider be approved to receive the Licensing Incentive Bonus. This map is updated on a quarterly basis and reflects data as of the date of generation. Data is subject to change.