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.

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.

ICYMI: August 2025 Updates

Federal Activity Slows with August Recess

This month, members of Congress enjoyed their annual mini summer break, returning home and putting in face time with constituents. Many focused on hyping legislative wins, raising awareness of issues with laws they did not support, identifying local concerns, and soliciting feedback (some more than others). 

The recess serves as both a burnout mitigator and a bit of a “calm before the storm” period before upcoming fights over spending bills (expect to hear plenty of threats about government shutdown ahead of the October 1 start to the new budget year) and Presidential civilian nominations for government posts.

That’s not to say nothing has happened at the federal level since our last update. The bipartisan Head Start Education and Development Workforce Advancement and Yield (HEADWAY) Act was introduced just before the recess by Senators Shelley Moore Capito (R-W.Va.) and Reverend Raphael Warnock (D-Ga.) on July 24. 

The Act would enable some Early Head Start teachers to work toward their CDA credential while actively employed, with the caveat that at least one teacher in every classroom already be credentialed. This would eliminate a significant barrier to entry for the ECE workforce. We’ve seen this proposal before—most recently with the reintroduction of the House version, sponsored by Representative Juan Ciscomani (R-Az.), earlier this year—but it has never made it out of committee. We’ll see if HEADWAY can make any headway this time around. 

Read: HEADWAY Act One-Pager (congress.gov) 

Sweeping Draft Bill for Native Children Released for Feedback

The Senate Committee on Indian Affairs, chaired by Sen. Lisa Murkowski (R-Ak.), released a discussion draft of The Native Children’s Commission Implementation Act with the goal of collecting feedback by September 12. The Act, based on recommendations in 2024’s The Way Forward report from The Alyce Spotted Bear & Walter Soboleff Commission on Native Children, includes an entire section (Title IX of the bill) dedicated to early care and learning programs. 

Highlights of the proposal include: 

• Strengthening the Indian Employment, Training, and Related Services Act (477 Program) by expanding the list of programs Tribes can include and streamlining both funding and administration.
• Increasing the Tribal set-aside in CCDBG from "not less than 2%" to "not less than 5%."
• Giving Tribes a bigger seat at the table through mandatory formal consultation on ECE policy, including a larger number of named stakeholders.
• Creating an Early Childhood Tribal Advisory Committee within the Office of Early Childhood Development at HHS to "offer ongoing recommendations on culturally grounded care, equitable access, early childhood data collection, and Tribal consultation practices."

Read: A Milestone for Native Children: New Federal Bill Reflects NICCA's Early Childhood Recommendations (National Indian Child Care Association)

Some States Move to Waitlists...

More than a third of New York counties (and New York City) have stopped accepting applications for the state’s child care voucher program, with more likely to follow soon. The NY Child Care Assistance Program serves nearly 100,000 families, but recent increases to funding ($1.5 billion this year) have failed to keep up with growing demand.  

Neighboring New Jersey is facing similar issues, where the NJ Child Care Assistance Program was forced to stop accepting new applications as of August 1. The program’s website now features a pop up that includes the ominous sentence, “Additional funding is not anticipated for the foreseeable future.” The program currently serves about 70,000 children.

While Others Make More Slots Available

Arizona added the necessary funding to move 900 children off their Child Care Assistance Program waitlist and enroll them in the program. This was just one part of a larger investment in early care and education in Governor Katie Hobbs’ Arizona Promise Budget. 

Mississippi reopened its child care voucher program after a pause dating back to March. The program currently serves just under 29,000 and the $15 million it received in this year’s budget will be enough to fund approximately 2,500 vouchers, only about half of the state’s 5,000-strong waitlist. The Department of Human Services had originally asked for $40 million to sustain the program’s previous enrollment levels.

Trending Original Research and Reports

We’ve decided to make this a new recurring section in this blog, with the goal of raising awareness of strong reporting, polling, and original research from the organizations and outlets we trust. Here’s what caught our attention this month: 

• States Create Trust Funds to Bolster Child Care and Early Childhood Education (zero2eight) - A strong overview of efforts in New Mexico, Connecticut, and Montana to create and fund child care trust funds that can serve as a sustainable source of permanent funding for critical programs and services. The need for these funds has become abundantly clear as states try to reconcile the loss of temporary American Rescue Plan funds that were used to increase supply and make child care more affordable for families.
• Why So Many Childcare Centers are Closing (Time) - Speaking of supply, this article effectively captures many of the reasons behind the “childcare is a textbook example of a broken market” quote it cites early on from Janet Yellen. Specific examples from child care providers in Wisconsin, North Carolina, and Maine provide a more human lens through which to view the funding challenges.
• Research Finds Preschool Enrollment Can Increase Parent Income (First Five Years Fund)  - A brief, digestible summary of a paper published by the National Bureau of Economic Research late last year indicating that universal pre-kindergarten enrollment in New Haven, Connecticut led to increased parent incomes both during and in the years following their children’s participation. Perhaps more importantly, the cost of offering the program was nearly offset by the increased tax revenue from participating parents.
• State Session Round Up: Summer 2025 (Child Care Aware of America) - CCAoA gives us an in-depth look at the progress made on early care and learning in the 2025 state legislative sessions. 

Other Developments Throughout the Country

Nebraska’s highly influential Buffett Early Childhood Institute released the results of a survey conducted in partnership with the Bipartisan Policy Center indicating that child care affordability is a serious challenge throughout the state. State Sen. Brian Hardin acknowledged the results of the poll, but pushed back on the idea that government subsidies were the answer, instead calling on employers to play a larger role. 

North Carolina’s new Child Care Task Force has been looking into innovative ways to tackle that state’s access and affordability issues, hinting at the possibility of a philanthropy-backed child care endowment fund that could potentially be announced as early as this fall.  

In South Carolina, the state Chamber of Commerce published the results of a poll of 500 parents of children under the age of six, estimating an economic hit of nearly $1 billion annually as a result of child care access and affordability problems. 

Pennsylvania House Republicans hosted a public hearing on the topic of child care in the last week of July. The lawmakers in attendance emphasized deregulation and workforce development programs aimed at making it easier to start, sustain, and work for child care businesses.