From “EdTech Digest” | Guest Column by Jamie Rosenberg | Published October 25,
2024
A fintech for edtech is helping where it counts – in early childhood education.
Earlier this year, Ohio and Connecticut joined Michigan, Kentucky and North Carolina as the latest states to embrace the Tri-Share cost-sharing model — a creative solution to help parents afford early care and education (ECE) so they can return to work.
With few options available and childcare costs skyrocketing across the country, more parents are opting to stay home, worsening the U.S. workforce shortage and hindering economic growth.
An Innovative Public-Private Partnership
The Tri-Share model, pioneered in Michigan in 2021, is an innovative public-private partnership that divides the cost of childcare equally between the government, the employer and the employee. In effect, all three parties benefit from supporting working parents and investing in the next generation.
While states are experimenting with slightly different iterations of the Tri-Share model, one fact remains consistent — the combination of public, employer and employee funds must be administered effectively to ensure any Tri-Share program’s success.
Far too often, public childcare subsidy funds are inaccessible due to outdated administrative procedures, compliance challenges and inadequate financial technology tools. Fortunately, modern, purpose-built digital wallet solutions can help ECE program administrators efficiently allocate and track public funds. Such technologies amplify the impact of public funding for ECE programs like Tri-Share, helping children, providers, parents and employers thrive.
Conflicting Priorities: Compliance and Accessibility
All publicly funded ECE programs have extensive compliance rules and regulations. However, programs like Tri-Share are especially difficult to navigate because the ECE field is comprised of various programs and funding streams, which vary from state to state. Moreover, ECE program administrators are bound by burdensome administrative procedures and stringent protocols that dictate where and how funding must be spent. As a result, funding is often delayed and, in some cases, not distributed at all.
Frequently, ECE program administrators struggle to maximize available funds because they lack adequate financial technologies to help ensure efficient distribution to providers and/or families. For example, program administrators may rely on manual payment and reimbursement processes or centralized procurement platforms, neither of which were designed to efficiently distribute public funds to a decentralized network of users. Without efficient payment processes, the impact of an ECE program like Tri-Share will be limited.
ECE program administrators can implement modern financial management technologies to help overcome some of these roadblocks. Digital wallets are one such technology that can help Tri-Share programs improve efficiency and remain compliant, while ensuring critical funding reaches ECE providers and children in need.
Ensuring Funding Reaches the Right People the Right Way
A digital wallet is an easily accessible, user-friendly online payment tool that government agencies and ECE programs can provide to an approved network of users. Users within the network can only make rule-based purchases, which preserves fiscal compliance and oversight.
Embedding compliance within the digital wallet application dramatically speeds up transactions between program administrators and beneficiaries. For instance, the Georgia Department of Early Care and Learning (DECAL) has used digital wallets to track, report and distribute over $140 million in grant-funded programs, completing more than 119,000 transactions and helping thousands of children and ECE providers. Programs like Tri-Share can use the same technologies to maximize efficiency and achieve parallel results.
DECAL uses an automated payments platform to distribute funds swiftly and securely, providing critical resources to teachers, ECE providers and children while also enabling fiscal accountability and transparency. By automating recurring tasks such as receipt collection, reconciliation, enrollment verification and payment processes, digital wallets alleviate significant strain on program administrators and ECE providers, saving valuable time for all parties involved.
In addition to time savings, digital wallets offer benefits like peace of mind for administrators, ECE providers and government officials due to the reduced risk of fraud and increased transparency regarding the appropriate use of public funds. These platforms also dramatically improve the search and selection process, helping to empower and connect families with an ECE provider that best fits their children’s needs.
Publicly funded institutions must be equipped with modern financial management tools to help innovative strategies like Tri-Share succeed. When public funding is easily accessible and securely managed, it maximizes the impact of taxpayer dollars and empowers state and local government agencies to deliver mission-critical funding to families, children and ECE providers.
Jamie Rosenberg is the founder and CEO of ClassWallet, a Hollywood, Florida-based financial technology company that has been used by state and local agencies across 34 states to maximize the impact of more than $4 billion in public funds. Prior to founding ClassWallet, Rosenberg launched the pioneering crowd-funding platform, AdoptAClassroom.org, which provided funding for teachers in 30% of schools and improved the learning environment of more than 3.5 million children. A graduate of Vanderbilt University and the University of Miami School of Law, Rosenberg lives in Miami with his wife Lisa, his three children Ivy, Reid and Nica, and their dog, Lola.