Maryland law prioritizes some child care scholarship applicants

The State Department of Education must keep a waitlist during an enrollment freeze and give priority to certain applicants. The waitlist covers eligible people who apply after a freeze begins. Priority goes to applicants with the greatest financial need and those applying for a child under age 3. A freeze cannot apply to otherwise eligible families or individuals enrolled in Temporary Cash Assistance or federal Temporary Assistance for Needy Families, children enrolled in federal Supplemental Security Income, or children who are homeless. The waitlist stays in place as long as eligible applicants outnumber available scholarships.

The Department must identify applicants whose children qualify for publicly funded prekindergarten, Head Start, or Early Head Start, share information about those programs, and provide enrollment help to eligible families on request. This process covers scholarship applicants whose children qualify for one of those early learning programs. The Department must continue this process while the scholarship waitlist is in effect. Before the state enrollment system starts, preschool slot information may use the latest enrollment count. Once the system starts, the Department must provide up-to-date information.

The Department must set scholarship amounts so some recipients owe no copay, and may set income-based copays for others. These rules apply to families receiving Child Care Scholarships. The zero-copay income test requires meeting both the poverty-line and regional-median-income limits. No copay is required for people in specified assistance programs who are working or in education or career training, people in the youth transition program, and people whose household income is both at or below the federal poverty line and no more than 50% of regional median income. For other recipients, the Department may set copays. For people with income at or below 65% of regional median income, the copay may not reach 3% of annual income; for those above 65%, it may not reach 7%. A sliding scale must raise copay shares gradually as income rises, with a maximum of 7%. A minimum copay may not exceed $10 a month. If the Department implements copays, it must give scholarship recipients and participating providers repeated notice, beginning at least 90 days before implementation. These copay rules take effect July 1, 2026. A separate change to the rule against increasing existing copay levels takes effect July 1, 2028.

The law removes the process that allowed some applicants to receive temporary scholarship eligibility before completing a full application. This applies to the Child Care Scholarship Program. If the Department determines that there may be no applicants on the waitlist within six months, it must report on whether the program should include presumptive eligibility and review the prior process. The change takes effect July 1, 2026. The review and report are required if the Department determines that no applicants may remain on the waitlist within six months.