Child care is one of the hottest topics in public discourse today, and for good reason. The sector is finally (if a bit slowly) getting the attention it deserves, and several universal truths have emerged:

1. The ROI for early childhood investment is staggering. From a purely economic standpoint, few investments pay off as strongly or as consistently as early childhood. The National Forum on Early Childhood Policy and Programs estimates returns between $4 and $9 per every $1 invested in high-quality early childhood programs.
2. Child care is a bipartisan issue. Although specific strategies and priorities may differ from right to left, all of society benefits from well-funded and well-functioning early care and education systems.
3. Child care is ripe for modernization. We’re not going to see sustainable gains by pouring more money into the old way of doing things. Better data and technology infrastructure can reduce barriers to entry, improve efficiencies, and give policymakers the data they need to make informed decisions.

October 2025 Updates

Government Shutdown Continues With No End in Sight

As the finger-pointing and partisan rhetoric continues to ramp up, what started as a temporary inconvenience now looms as a potentially devastating threat to tens of millions of Americans. At the time of publication, the current shutdown already ranks as the second longest in U.S. history, surpassed only by the one lasting 34 days in 2018-2019 during the first Trump presidency. 

While the shutdown has already resulted in significant delays for many federally provided services and a freeze on crucial grant funding, including CCAMPIS and PDG B-5, those effects pale in comparison to what will happen when SNAP programs run out of funding (as early as October 27 for some states). When that happens, children throughout the country will go hungry. In many cases, there is no stopgap or reserve fund to tap into. Payments will simply cease for the duration of the shutdown. The same is true for WIC, which currently serves more than 7 million low-income families. 

On the ECE front, the President has made it clear that the administration is using the shutdown as a political hammer to halt federal programs “that we wanted to close up, or that we never wanted to happen.” He added, “We are closing up Democrat programs that we disagree with, and they’re never going to open again.” Thus far, those efforts have resulted in approximately 4,000 reduction-in-force notices during the shutdown, including most of the Office of Special Education Programs and a large contingent of Department of Health and Human Services staff. Those RIFs were temporarily blocked by court order on October 15. 

Per First Five Years Fund, more than 100 Head Start programs are scheduled to receive grants on November 1, meaning tens of thousands of children could lose access to their care and education. FFYF has put together a toolkit in support of an October 29 Day of Action to protect that access. For those looking for any kind of silver lining, CCDF and CACFP appear to have enough of a buffer to weather the shutdown for a little longer. 

Read: Issue Brief: How a Government Shutdown Hurts Kids (First Focus on Children)

ACF Updates its Vision, Mission, Values, Priorities, and Guiding Principles

The Administration for Children and Families, which has lost 30-40% of its workforce this year as part of the ongoing reduction in force efforts across HHS, issued new guidance on the types of programs it intends to fund and support under the Trump administration. This new “strategic alignment initiative,” announced by Acting Assistant Secretary Andrew Gradison, includes a number of familiar talking points. We urge our readers to review the full announcement, but here’s a summary of the agency’s new priorities and principles: 

• Programs that promote work and self-sufficiency: ACF will be funding programs that “demonstrate measurable reductions in dependency,” using employment outcomes as a KPI. 
• Promoting marriage and family formation: Traditional, two-parent households are a cornerstone of this priority. Mention is also made of “programs that recognize and support the value of human life.” 
• Gold-standard research: We certainly need more evidence-based policy and funding decisions in this space. The agency’s stated commitment to “gold standard science” is a big win, coming at a time when anti-science bills are flying through state legislatures at breakneck speed. This feels like a welcome pivot for the administration, and we are looking forward to seeing this criteria in action.
• Values-aligned funding: Employment, marriage, “biological definitions of sex,” immigration, and efficiency top the list of values that will drive funding decisions. Programs that contain any hint of DEI and gender ideology will not be supported. Immigrants who are not “qualified aliens” will not be eligible for ACF-funded programs, to the extent permitted by law. 
• Parental authority: ACF has voiced its support for parent choice in curriculum and classroom environment, including the “right to protect their children from exposure to content that burdens the exercise of their religious beliefs.” 
• Tough on crime: ACF will no longer support “harm reduction” activities or “housing first” policies. They are encouraging “more competition amongst grantees in relevant programs,” including the Runaway and Homeless Youth Program, with prioritization for grantees that emphasize treatment, recovery, and self-sufficiency. 

Child Care Matters will continue to monitor how these new priorities and principles affect federal policy and investment in the months to come. 

Read: ACF Vision, Mission, Values, Priorities, & Guiding Principles

Texas Expands its Workforce-Centered Child Care Supports

Texas has long taken a unique approach to addressing child care access and affordability, with many of its most recent significant programs and initiatives spearheaded by groups of employers and administered by the Texas Workforce Commission (TWC). Child care has always been a workforce issue, so the concept isn’t far-fetched, it’s just different from how most states view child care policy. 

This month, TWC announced a new Employer Child Care Solutions initiative, through which vetted and approved technical assistance providers will help employers set up child care solutions at or near their workplaces. Promoted services include: 

• Employer needs assessments
• Employer feasibility and cost analysis studies
• Options analysis and recommendations report
• Site selection report
• Business plans

TWC is currently accepting proposals from interested vendors to support the program. 

Read: TWC Launches Employer Child Care Initiative

Arkansas Child Care Funding Crisis Reaches a Tipping Point

The Arkansas Early Childhood Commission is scrambling this month to find a stopgap solution to child care affordability for low-income families. After the Department of Education announced a significant cut (~18%) to reimbursement rates in September, followed by a major public outcry from child care providers, the deadline for implementation got pushed back from October to November. Now that the time has arrived without any movement on a solution, providers are at imminent risk of needing to close their doors. 

The cuts were necessitated in part by the state spending “$6 million to $9 million more each month than it was budgeted” under CCDF. Couple that with the expiration of COVID-era federal funding, and there’s simply no longer enough money to go around for the state’s School Readiness Assistance voucher program. As of Tuesday, October 21, Department of Education Deputy Commissioner Stacy Smith said, “We have about five weeks of remaining funding left in that CCDF pot.” 

Proposed scenarios include reducing the cuts to reimbursement rates, capping copay requirements for families with multiple children in the program, cutting school-aged children from the program, boosting work requirements, and identifying alternative funding streams.

Read: Emergency work group aims to cushion child care providers from drastic cuts (Arkansas Times) 

Trending Original Research and Reports

• Issue Brief: U.S. Child Poverty in 2024 - First Focus on Children examined data and trends from the U.S. Census Bureau related to child poverty and provided a blueprint for federal policy based on years of research. Early indications are that the number of children experiencing poverty (already “greater than the population of 11 states”) will almost certainly increase in 2025 without congressional intervention. 
• National Home Visiting Resource Center: 2025 Home Visiting Yearbook - This comprehensive resource, published by James Bell Associates and the Urban Institute, leverages 2024 data to provide a deep dive into the impact of home visiting at the national and state levels. It includes data on reach, workforce, outcomes, and both evidence-based and emerging models of home visiting services. 

Other Developments Throughout the Country

At the federal level, two noteworthy new bills were introduced just prior to the shutdown: the bipartisan Expanding Childcare in Rural America (ECRA) Act aims to offer loans and grants aimed at increasing supply, quality, and affordability of care in agricultural and rural communities through U.S. Department of Agriculture Rural Development. 

The Child Care for Every Community Act was also reintroduced by a group of Democratic representatives led by Sen. Elizabeth Warren and Rep. Mikie Sherrill. The Act would draw from successful approaches in the U.S. military child care program and Head Start to address accessibility, affordability, quality, workforce investment, and Pre-K services. 

Montgomery County, Alabama passed a bill to increase eligibility for their day care and child care property tax credit, moving the cap from $3,000 to $10,000. The county is in need of more licensed child care providers, including family child care facilities, to meet family demand. Frederick County, Maryland is currently considering the same change to their tax credit.

ICYMI: September 2025 Updates

Everybody's Talking About New Mexico

No state in the country has done more to improve child care access and affordability this decade than New Mexico. As one of the first states to stand up an early childhood trust fund (allocated from its Land Grant Permanent Fund, which collects and invests profits from oil and gas revenues), NM’s funding model has been a beacon of light in challenging times for ECE. In just a few short years, the state has increased supply, improved pay for its workforce, and made child care more affordable for families with income up to 400% of the federal poverty level. 

This month, Governor Michelle Lujan Grisham and the New Mexico Early Childhood Education and Care Department announced the removal of that income cap, making New Mexico the first state in the country to offer universal free child care for all residents. This exciting announcement, the culmination of many years of investment, infrastructure building, advocacy, and public support, is a clear indication that even the most optimistic vision for what child care in the United States can be is attainable. 

The nation is watching closely. Can a state that has ranked dead last for child well-being four years in a row per the Annie E. Casey Foundation Kids Count Data Book turn its fortunes around and usher in a new era of economic growth and family prosperity with this unparalleled investment in early care and education? If so, other states will have a strong incentive to take notice. 

Read: New Mexico is first state in nation to offer universal child care (Office of the Governor)

The Child Care Modernization Act

The Child Care and Development Block Grant (CCDBG) was last reauthorized more than a decade ago in 2014. In the latest sign of bipartisan support for ECE investment, Senators Deb Fischer (R-NE), Kirsten Gillibrand (D-NY), John Hickenlooper (D-CO), and Susan Collins (R-ME) introduced the Child Care Modernization Act, which would update and strengthen the program to better meet the needs of families, providers, and communities. 

The Act leans into several key components of strong ECE systems, including:

• A shift to cost estimation models for providers, which would result in reimbursement rates more closely aligned with the true cost of quality care.
• Support for mixed delivery models for child care and preschool, ensuring more parental choice and more flexibility within the system.
• A new grant program designed to increase child care supply.
• Dedicated technical assistance and business coaching for in-home and rural child care providers, along with more investment in shared services initiatives for underserved provider communities.
• A requirement for states to review their licensing, health, and safety requirements to eliminate redundancies and identify oversights that are adding to regulatory burdens for providers.

This feels like the most important bipartisan legislative proposal for ECE since the Child Care Availability and Affordability Act was introduced in March. Given the amount of time that has passed since CCDBG was last addressed, we are hopeful that this one can see some early and sustained momentum. 

Read: First Five Things to Know About: The Child Care Modernization Act (FFYF)

CCAMPIS Also Targeted for Reauthorization

CCBDG is not the only federal grant program in need of a refresh. The Child Care Access Means Parents in School (CCAMPIS) Reauthorization Act would increase funding levels more than sixfold, from $75 million/yr to $500 million/yr, helping approximately 100,000 college students afford quality child care. 

CCAMPIS has endured a rollercoaster ride this year, finding itself on the chopping block in the Trump administration’s discretionary budget request and the House Appropriations Committee’s recommendations, only to eventually be sustained at current funding levels in the final budget bill. 

In a field where the discussion often centers around the false choice between staying in the workforce and paying the increasingly unaffordable cost of high quality care or staying home with young children, the students who are trying to attain the skills and credentials they need to enter the workforce in the first place represent a much smaller, but equally important audience. The need for support is also being addressed by the Kids on Campus initiative, which aims to establish at least 50 Head Start programs on community college campuses by 2030. 

As of 2023, CCAMPIS was serving 11,000 undergraduate students across 264 colleges in the United States. It reaches only about 14% of eligible families due to underfunding.  

Read: Parenting Students Need Affordable Child Care. The CCAMPIS Reauthorization Act Will Help (New America)

Massachusetts Considers Greater Investment in Family, Friend, and Neighbor Care

One of the most compelling recurring themes in recent high-level policy discussions has been a growing acknowledgement of the critical role of family child care providers, both licensed and unlicensed. Family, friend, and neighbor (FFN) care in particular fills a massive need for families with irregular work schedules, families that desire more culturally responsive or linguistically aligned options than they can get from center-based care options, and families that are just more comfortable leaving their children in the hands of familiar people. Of the many common categories of child care arrangements, FFN care is relied upon by more than three times as many families as any other type.

In Massachusetts, the FFN community is awaiting an upcoming report on the feasibility of implementing and overseeing a formal FFN care network, with the immediate goal of achieving at least minimum-wage level rates for providers. The Department of Early Education and Care has recognized “the need for better compensation and ‘better communication’ about existing informal child care reimbursement.” The estimated cost increase to get to a minimum wage level would be approximately $4.2 million, not accounting for increased program demand. 

Read: Advocates eye legislative action to raise pay for informal child caregivers (WWLP)

Trending Original Research and Reports

Childcaregap.org - This initiative, spearheaded by the Buffett Early Childhood Institute in collaboration with Child Care Aware of America and the Bipartisan Policy Center, is “the first study to both quantify the supply and nation’s child care gap and do so in a way that factors in accessibility.” It’s a fascinating look at both the gap itself and the economic impact of inaccessible care. For more context, we recommend Linda Smith’s LinkedIn article on the project here. 

House Proposed Level Funding for CCDBG Would Mean Nearly 50,000 Children Lose Access Since Last Increase - In a stark reminder of why level funding just isn’t good enough as costs continue to rise and inflation continues to affect families, the Center for Law and Social Policy (CLASP) released this report on the “compounded impact of two years of stagnant funding.” The report includes a state-by-state breakdown of the number of children who have or will lose access to CCDBG-funded child care if funding stays the same.

FFYF’s 2025 State Fact Sheets - This updated resource from the First Five Years Fund provides extensive state and national data on the impact of federal investments in child care and early learning. It serves as the most comprehensive way to track where the money for this system of systems is coming from, where it’s going, and who it serves. 

Other Developments Throughout the Country

A federal judge issued a nationwide block on the Trump administration’s directive to prevent Head Start and other community health programs from serving people without legal citizenship status by reclassifying the programs as “federal public benefits.” The change threatened to block more than 100,000 children from accessing educational opportunities through Head Start.

California is facing a scenario dreaded by child care advocates in any state that relies on “sin taxes” to fund the industry. The state’s dual need to support a struggling legal cannabis industry and maintain child care funding levels from cannabis taxes has led to a struggle over approximately $81 million in state child care subsidy funding that could be at risk should the tax rate be lowered. A spokesperson for Governor Gavin Newsom said “We can both support the legal cannabis industry and protect child care. If the measure reaches the governor’s desk and is signed into law, we will work with the Legislature to ensure there are no cuts to child care due to this policy change.”

Know someone who would make an excellent state system leader? Kansas is hiring someone to lead their new Office of Early Childhood. The Director of Early Childhood position will remain posted on the State of Kansas Careers Portal until the position is filled. 

Missouri governor Mike Kehoe released the Executive Order 25-15 Implementation Report outlining the planned methodology for reducing child care licensing requirements by at least 10% while also improving the readability and accessibility of the state child care licensing regulations. This is the latest example of state-level efforts to “right-size” regulations by removing outdated or inconsistent requirements and providing more transparency for providers. The Executive Order came on the heels of United WE’s 2024 Missouri Childcare Licensing Research report, highlighted in this blog nearly a year ago.