Family Child Care Advocates and Supporters,
We are reaching out with an urgent update regarding the stability of our nation’s child care funding & infrastructure. Recent federal actions have introduced confusion about child care funding and placed unprecedented financial pressure on FCC educators and families.
The Details: What Is Happening?
The U.S. Department of Health and Human Services (HHS) has frozen more than $10 billion in federal funding for child care and social services. This freeze specifically targets five states—Minnesota, New York, California, Colorado, and Illinois—immediately impacting the Child Care and Development Fund (CCDF). This action, in response to unsubstantiated claims of child care fraud, leaves millions of families and providers across the country scrambling to determine what comes next.
Beyond the freeze, HHS has announced it will require all states to submit additional documentation before releasing federal funds, which may delay child care payments. HHS also intends to roll back critical 2024 reforms designed to provide financial stability to small child care businesses. These reforms encouraged states to start enrollment-based payments, paying in advance of services & using contracts. Rolling back these policies will weaken our child care infrastructure and create more instability for FCC programs, leaving less reliable and high-quality care for families.
Earlier this week, NAFCC released a statement, “Childcare Funding Actions and Overall Oversight,” addressing these concerns.
What does this mean for FCC?
Family child care programs are essential small businesses operating on thin margins. We understand every state is in the process of determining how this will impact child care funding in their state. However, when funding is frozen or billing becomes unpredictable, the consequences are immediate and far-reaching:
- Financial Strain on Educators: We are already hearing from dedicated educators who are willing to continue caring for children without pay just to ensure their safety and well-being. However, this is not sustainable and puts the educators’ own financial security at risk.
- Workforce Disruptions: Without stable, predictable child care, many parents—particularly women—will be forced to leave the workforce or reduce their hours, stalling economic growth and family stability.
- Less Stability for Children: These disruptions force families to scramble for backup options, breaking the consistent bonds between children and their trusted caregivers.
Take Action Now
Funding from the Child Care and Development Block Grant (CCDBG) is essential. Any disruption in funding, even if proposed or temporary, creates immediate uncertainty for educators and families. Such disruptions further strain an already fragile child care system and reduce access to care for families who rely on these services to work, support their households, and contribute to the local economy.
- ✍️ Share Your Story: Tell us how any changes or disruptions in child care funding impact your business.
- 📧 Visit our Action Center: Urge your elected officials to protect child care funding & stability.
- 🛠️ Action Toolkits: Access resources to advocate in English or Spanish.
- 📅 SAVE THE DATE: NAFCC Policy Webinar – January 22, 2026, at 8 PM EST
We will continue to share updates as we learn more information. Thank you for standing with us to protect the future of child care.
Sincerely,
The NAFCC Policy and Advocacy Team
