The Trump administration has proposed new regulations that will hurt the child care sector and harm the families that rely on child care every day to go to work. Child care prices continue to rise faster than inflation and, in most states, child care costs families more than housing or college. Yet child care businesses operate on thin profit margins and providers report that rising costs for staff, rent, insurance, and goods have made it increasingly difficult to stay in business. Unfortunately, rather than tackle these challenges, the Trump administration is poised to finalize new rules that are destabilizing for child care providers, will make it even more expensive for them to provide care, and in many places will lead to higher prices and fewer options for parents.
2024 Improvements to the Child Care Development Fund Program
The Trump administration is proposing changes to the Child Care Development Fund program (CCDF), a $12.4 billion program that helps lower-income working families afford child care and improves the quality of care for all children. CCDF helps nearly 1 million families afford child care every month, allowing those parents to go to work or school and puts those families on stronger economic footing. Because CCDF is a federal block grant program to states, state agencies administer the program and determine many of the program details, within certain federally required parameters. Most states administer child care assistance by first deeming a child and family eligible and then directing the state payment directly to the eligible child care provider chosen by the parent.
In 2024, the Biden administration finalized a CCDF rule that required states to pay providers serving families paying with r CCDF subsidies more fairly and on time, lowered costs for parents, and increased the availability of care for parents in the program in categories of care experiencing scarcity, such as care for children with disabilities. Two of the Biden administration’s changes in the 2024 rule are particularly crucial for a healthier child care sector: the requirement that states pay providers based on child enrollment instead of allowing the option to pay based on child attendance, and the requirement that states pay providers prospectively or at the beginning of service instead of allowing reimbursement weeks later. These two reforms were long-sought by child care providers and other experts to make it easier for providers to serve families with subsidies, help stabilize child care operations nationwide, and make it easier for parents to find the child care they needed. These two reforms align program rules with the federal law, which requires states to use “generally accepted payment practices” with providers—something that had not been enforced by program rules until 2024. Since more than 145,000 licensed or registered child care providers (about half of all licensed and registered providers) serve some children participating in CCDF, these reforms had broad benefits to the child care sector and the millions of families that rely on it daily.
States have made good progress since the 2024 rule was passed. The 2024 rule gave states until August 2026 to comply, after states said they would need time for the policy, budget, and IT changes necessary to meet the new requirements. When the reforms were finalized in March 2024, twenty-two states already paid by enrollment and six states paid at the beginning of service delivery. The CCDF policy reforms were not partisan or ideological—the breakdown of states already compliant when the reforms were passed was about half red states and half blue. State payment policies had mainly been related to cost and logistics. Though states were aware at the time that payments based on attendance or at the end of service were destabilizing for providers and reduced parents’ child care options, some states made those tradeoffs to stretch their funds in order to serve more families statewide. Recent tracking of state policies finds twenty-seven states are now using enrollment-based payment practices and eleven states are paying providers prospectively or at the beginning of services as required by the 2024 reforms.
Trump’s Harmful Proposal to Roll Back 2024 Reforms
The Trump administration first announced plans for a new child care regulation at a conference hosted by the U.S. Department of Health and Human Services (HHS) in July 2025, confirmed those plans via email, and published the first formal step in the regulation-making process in the Federal Register on January 5, 2026. Citing a need to “restore state flexibility” and reduce state “burden” and “cost,” they stated they would be repealing four requirements from the 2024 CCDF rule, including that they would (1) allow states to pay providers based on child attendance instead of enrollment, and (2) allow states to reimburse providers weeks after service instead of paying at the beginning of service. Though not the original reason for the 2024 repeal, the Trump administration has recently insinuated in the press that enrollment-based payment and timely payments are somehow inherently fraudulent and claimed their new regulations are needed to reduce fraud in CCDF. These claims are entirely manufactured. These payment practices are legitimate and essential business practices that reflect the fixed costs of running a child care business and not loopholes for improper billing. Casting them otherwise further threatens to stabilize these essential small businesses that play such a crucial role in our country’s economic engine.
A final rule is expected to be issued by the Trump administration soon, and if it looks similar to the proposal, it will be a damaging blow to the already hurting child care sector. Providers and families will suffer the consequences.
Why Paying Providers by Child Enrollment Makes Sense
Most child care providers charge private-pay families based on a child’s enrollment, not daily attendance. This is standard practice (also known as “generally accepted practice”) in the private market because it reflects the fixed cost of child care operations. Costs for rent, staff, utilities, and classroom materials are all based on total child enrollment. A child’s absence due to sickness or a family vacation doesn’t lessen the provider’s cost of operating their program. Absences are anticipated parts of running a child care business and must be baked into the fee structure. This is no different than how education programs are funded. Head Start, state pre-kindergarten, public and private K–12 schools, and post-secondary education are all funded based on student enrollment, not daily attendance, because the cost of providing these services is a fixed cost based on student enrollment. In all these child care and education services, costs are driven by the number of staff needed to be present daily, the size of the school or child care building, and the goods and materials needed to provide learning experiences for the number of enrolled children (such as books, desks, lab materials, and gymnasiums in schools, or toys, books, highchairs, and cribs in child care). The staff, building, and goods costs are not lower because an enrolled child stays home for a short time while they are sick. Attendance-based payment in child care is the same as expecting a private school to refund tuition to a parent for the days a child is kept home sick with the flu: it’s a ridiculous notion, yet it was allowable in CCDF until the 2024 rule; and would be again under the new Trump rule. When the Trump proposal speaks of cost “savings”, it is actually just a cost shift onto the backs of child care providers who cannot afford it.
Child care providers in states that pay based on attendance receive lower fees when serving a child participating in the subsidy program than serving a private-pay family, because private-pay families pay based on enrollment. Illness, family vacation, center closures for Christmas, or a day of staff training are all common reasons why a child might not attend a full month of care. For providers, being paid based on attendance creates a clear and understandable disincentive for them to serve families paying with CCDF subsidies, which means that lower-income families who participate in the CCDF program are left with fewer options for care. Another impact may be that private-pay families are charged higher prices, so that the provider can offset the inadequate attendance-based payments from the state for families with subsidies.
For providers, being paid based on attendance creates a clear and understandable disincentive for them to serve families paying with CCDF subsidies.
The proposed Trump policies are already reversing progress and harming providers and families. For example, while the Ohio state legislature had already passed the policy changes necessary to implement enrollment-based and prospective payments by July 2026, after the Trump administration announced they would be rolling back the 2024 regulation, Ohio passed new legislation delaying the enrollment-based payment process by two years, and the state appears poised to delay it indefinitely. The Washington State legislature also is currently moving legislation to repeal enrollment-based payment policies. Conversations with experts in some of the twenty-three states where states still pay based on attendance suggest progress toward enrollment-based payment has slowed or halted because of the planned Trump repeal.
Why Timely Payments to Providers Are Important
Most child care providers require private-pay families to pay upfront at the beginning of service because it helps ensure more stable child care operations, especially given the lean budgets on which caregivers operate. Until the 2024 reforms, CCDF allowed states to reimburse providers weeks after providing service. As with attendance-based payment practices, payment after service rather than upfront creates a significant disincentive for providers to serve families paying with child care subsidies and destabilizes operations for providers who accept subsidy payments. Surveys of providers and a report by the HHS Office of the Inspector General make clear how important this practice is to provider stability, cash flow, and willingness to serve families with subsidies. When CCDF payment practices help stabilize child care providers, it not only benefits families who pay with CCDF subsidies, but it also benefits the millions of private-pay families who rely on a strong child care sector by helping keep child care open and available.
When CCDF payment practices help stabilize child care providers, it not only benefits families who pay with CCDF subsidies, but it also benefits the millions of private-pay families who rely on a strong child care sector by helping keep child care open and available.
If the Trump administration finalizes its new regulations as proposed, it would be ignoring the pleas from these small businesses to ensure the federal child care program treats them fairly for the critical services they provide to families and the communities.
What’s Next
America has an untenable child care crisis. The average cost of care for one child is over $13,000 a year, there’s not enough child care to meet families’ needs, and child care providers are struggling to stay in business because parents can’t afford what it actually costs to provide care. Instead of addressing any of these issues, the Trump proposal for CCDF takes child care in the wrong direction: it will make it more expensive for child care providers to serve families with subsidies, shift costs to private-pay families already paying at the top of their budgets, and make it harder for families across the country to find the care they need.
Tags: child care providers, ccdf, donald trump, child care, affordability
Trump Administration Poised to Make Life Even Harder for Child Care Providers and Parents
The Trump administration has proposed new regulations that will hurt the child care sector and harm the families that rely on child care every day to go to work. Child care prices continue to rise faster than inflation and, in most states, child care costs families more than housing or college. Yet child care businesses operate on thin profit margins and providers report that rising costs for staff, rent, insurance, and goods have made it increasingly difficult to stay in business. Unfortunately, rather than tackle these challenges, the Trump administration is poised to finalize new rules that are destabilizing for child care providers, will make it even more expensive for them to provide care, and in many places will lead to higher prices and fewer options for parents.
2024 Improvements to the Child Care Development Fund Program
The Trump administration is proposing changes to the Child Care Development Fund program (CCDF), a $12.4 billion program that helps lower-income working families afford child care and improves the quality of care for all children. CCDF helps nearly 1 million families afford child care every month, allowing those parents to go to work or school and puts those families on stronger economic footing. Because CCDF is a federal block grant program to states, state agencies administer the program and determine many of the program details, within certain federally required parameters. Most states administer child care assistance by first deeming a child and family eligible and then directing the state payment directly to the eligible child care provider chosen by the parent.
In 2024, the Biden administration finalized a CCDF rule that required states to pay providers serving families paying with r CCDF subsidies more fairly and on time, lowered costs for parents, and increased the availability of care for parents in the program in categories of care experiencing scarcity, such as care for children with disabilities. Two of the Biden administration’s changes in the 2024 rule are particularly crucial for a healthier child care sector: the requirement that states pay providers based on child enrollment instead of allowing the option to pay based on child attendance, and the requirement that states pay providers prospectively or at the beginning of service instead of allowing reimbursement weeks later. These two reforms were long-sought by child care providers and other experts to make it easier for providers to serve families with subsidies, help stabilize child care operations nationwide, and make it easier for parents to find the child care they needed. These two reforms align program rules with the federal law, which requires states to use “generally accepted payment practices” with providers—something that had not been enforced by program rules until 2024. Since more than 145,000 licensed or registered child care providers (about half of all licensed and registered providers) serve some children participating in CCDF, these reforms had broad benefits to the child care sector and the millions of families that rely on it daily.
States have made good progress since the 2024 rule was passed. The 2024 rule gave states until August 2026 to comply, after states said they would need time for the policy, budget, and IT changes necessary to meet the new requirements. When the reforms were finalized in March 2024, twenty-two states already paid by enrollment and six states paid at the beginning of service delivery. The CCDF policy reforms were not partisan or ideological—the breakdown of states already compliant when the reforms were passed was about half red states and half blue. State payment policies had mainly been related to cost and logistics. Though states were aware at the time that payments based on attendance or at the end of service were destabilizing for providers and reduced parents’ child care options, some states made those tradeoffs to stretch their funds in order to serve more families statewide. Recent tracking of state policies finds twenty-seven states are now using enrollment-based payment practices and eleven states are paying providers prospectively or at the beginning of services as required by the 2024 reforms.
Trump’s Harmful Proposal to Roll Back 2024 Reforms
The Trump administration first announced plans for a new child care regulation at a conference hosted by the U.S. Department of Health and Human Services (HHS) in July 2025, confirmed those plans via email, and published the first formal step in the regulation-making process in the Federal Register on January 5, 2026. Citing a need to “restore state flexibility” and reduce state “burden” and “cost,” they stated they would be repealing four requirements from the 2024 CCDF rule, including that they would (1) allow states to pay providers based on child attendance instead of enrollment, and (2) allow states to reimburse providers weeks after service instead of paying at the beginning of service. Though not the original reason for the 2024 repeal, the Trump administration has recently insinuated in the press that enrollment-based payment and timely payments are somehow inherently fraudulent and claimed their new regulations are needed to reduce fraud in CCDF. These claims are entirely manufactured. These payment practices are legitimate and essential business practices that reflect the fixed costs of running a child care business and not loopholes for improper billing. Casting them otherwise further threatens to stabilize these essential small businesses that play such a crucial role in our country’s economic engine.
A final rule is expected to be issued by the Trump administration soon, and if it looks similar to the proposal, it will be a damaging blow to the already hurting child care sector. Providers and families will suffer the consequences.
Why Paying Providers by Child Enrollment Makes Sense
Most child care providers charge private-pay families based on a child’s enrollment, not daily attendance. This is standard practice (also known as “generally accepted practice”) in the private market because it reflects the fixed cost of child care operations. Costs for rent, staff, utilities, and classroom materials are all based on total child enrollment. A child’s absence due to sickness or a family vacation doesn’t lessen the provider’s cost of operating their program. Absences are anticipated parts of running a child care business and must be baked into the fee structure. This is no different than how education programs are funded. Head Start, state pre-kindergarten, public and private K–12 schools, and post-secondary education are all funded based on student enrollment, not daily attendance, because the cost of providing these services is a fixed cost based on student enrollment. In all these child care and education services, costs are driven by the number of staff needed to be present daily, the size of the school or child care building, and the goods and materials needed to provide learning experiences for the number of enrolled children (such as books, desks, lab materials, and gymnasiums in schools, or toys, books, highchairs, and cribs in child care). The staff, building, and goods costs are not lower because an enrolled child stays home for a short time while they are sick. Attendance-based payment in child care is the same as expecting a private school to refund tuition to a parent for the days a child is kept home sick with the flu: it’s a ridiculous notion, yet it was allowable in CCDF until the 2024 rule; and would be again under the new Trump rule. When the Trump proposal speaks of cost “savings”, it is actually just a cost shift onto the backs of child care providers who cannot afford it.
Child care providers in states that pay based on attendance receive lower fees when serving a child participating in the subsidy program than serving a private-pay family, because private-pay families pay based on enrollment. Illness, family vacation, center closures for Christmas, or a day of staff training are all common reasons why a child might not attend a full month of care. For providers, being paid based on attendance creates a clear and understandable disincentive for them to serve families paying with CCDF subsidies, which means that lower-income families who participate in the CCDF program are left with fewer options for care. Another impact may be that private-pay families are charged higher prices, so that the provider can offset the inadequate attendance-based payments from the state for families with subsidies.
The proposed Trump policies are already reversing progress and harming providers and families. For example, while the Ohio state legislature had already passed the policy changes necessary to implement enrollment-based and prospective payments by July 2026, after the Trump administration announced they would be rolling back the 2024 regulation, Ohio passed new legislation delaying the enrollment-based payment process by two years, and the state appears poised to delay it indefinitely. The Washington State legislature also is currently moving legislation to repeal enrollment-based payment policies. Conversations with experts in some of the twenty-three states where states still pay based on attendance suggest progress toward enrollment-based payment has slowed or halted because of the planned Trump repeal.
Why Timely Payments to Providers Are Important
Most child care providers require private-pay families to pay upfront at the beginning of service because it helps ensure more stable child care operations, especially given the lean budgets on which caregivers operate. Until the 2024 reforms, CCDF allowed states to reimburse providers weeks after providing service. As with attendance-based payment practices, payment after service rather than upfront creates a significant disincentive for providers to serve families paying with child care subsidies and destabilizes operations for providers who accept subsidy payments. Surveys of providers and a report by the HHS Office of the Inspector General make clear how important this practice is to provider stability, cash flow, and willingness to serve families with subsidies. When CCDF payment practices help stabilize child care providers, it not only benefits families who pay with CCDF subsidies, but it also benefits the millions of private-pay families who rely on a strong child care sector by helping keep child care open and available.
If the Trump administration finalizes its new regulations as proposed, it would be ignoring the pleas from these small businesses to ensure the federal child care program treats them fairly for the critical services they provide to families and the communities.
What’s Next
America has an untenable child care crisis. The average cost of care for one child is over $13,000 a year, there’s not enough child care to meet families’ needs, and child care providers are struggling to stay in business because parents can’t afford what it actually costs to provide care. Instead of addressing any of these issues, the Trump proposal for CCDF takes child care in the wrong direction: it will make it more expensive for child care providers to serve families with subsidies, shift costs to private-pay families already paying at the top of their budgets, and make it harder for families across the country to find the care they need.
Tags: child care providers, ccdf, donald trump, child care, affordability