This bill, titled the "Preparing and Resourcing Our Student Parents and Early Childhood Teachers Act" or the "PROSPECT Act," aims to address critical needs in infant and toddler child care. It authorizes a total of $9 billion in federal appropriations for fiscal years 2026 through 2030 to establish competitive grants for eligible entities, primarily community colleges and minority-serving institutions. The overarching purposes are to expand access to infant and toddler child care for student parents and to grow, diversify, and strengthen the workforce pipeline of highly effective infant and toddler child care providers, especially in underserved communities.

The bill outlines four main types of grants: planning grants, access grants, impact grants, and pipeline grants. Eligible entities must first receive and complete a planning grant before applying for the other three types. These grants are awarded competitively, prioritizing institutions with a high percentage of Pell Grant recipients and those located in infant and toddler child care deserts.

Access grants are designed to provide free, high-quality infant and toddler child care for up to 500,000 children of student parents. Funds can be used to operate on-campus child care centers, pay child care costs at licensed facilities, expand existing center resources, lengthen operating hours, and establish drop-in or flex child care options. On-campus centers supported by these grants must prioritize low-income student parents and pay staff wages comparable to elementary educators, ensuring a living wage.

Impact grants focus on expanding the supply and quality of child care within the community. Activities include contracting with local child care resource and referral organizations for technical assistance, training, and mentorship. These grants also support microenterprise grants for qualified professionals to open or expand infant and toddler child care programs, particularly in areas with low access, and prioritize communities of color and low-income communities.

Pipeline grants aim to grow and strengthen the workforce of infant and toddler child care providers. Eligible entities can use funds to establish or expand early childhood educator preparation programs, hire faculty, upgrade on-campus child care centers into lab schools, and offer microgrants to students for tuition and other expenses. These grants also encourage partnerships with high schools and four-year institutions to create clear pathways into the early childhood education field.

Beyond the grant program, the bill amends the Child Care and Development Block Grant (CCDBG) Act of 1990. It expands eligibility for child care assistance to include parents enrolled in higher education programs and prohibits states from imposing more restrictive eligibility standards than federal requirements. Furthermore, it increases federal matching payments to states, offering 90 percent matching for expenditures on infant and toddler child care when states meet certain market rate payment standards.

Finally, the bill mandates outreach regarding the dependent care allowance for Federal student aid. It requires institutions to inform students with dependents that they may be eligible to include a dependent care allowance in their cost of attendance, explaining its potential effect on financial aid and how to apply. The bill also includes a strong nondiscrimination clause for all programs and activities funded under its provisions.