Excerpts
I live in the small city of Rolla, Missouri, where half the child care centers have closed in the past six years. In the past year, my state has lost 1,771 child care slots due to closures.
This problem isn’t isolated to Rolla – child care providers are closing in other rural areas. Some of the challenges these centers face are widespread. U.S. child care workers typically earn little money, yet child care costs are high for many families.
Approximately 1.4 million children whose families are low-income benefit from child care subsidies, which means the federal and state government partially cover the cost of child care. States typically receive federal funding that they match and then give to subsidize individual children’s care at child care centers.
In early January 2026, the Trump administration announced that it had temporarily frozen federal child care subsidy payments to all states because of fraud concerns in Minnesota.
A group of states – Minnesota, New York, California, Illinois and Colorado – then sued the Trump administration. A federal judge ruled on Jan. 26 that the administration must deliver nearly US$10 billion in federal child care subsidies to these states.
The new policy also creates new verification rules – like stricter proof of parents’ employment – that are making it more time-consuming and complicated to receive subsidies.
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How child care subsidies work
Placing an infant in an early childhood or day care center can cost parents annually an average of $15,000. These costs can rise up to more than $28,000 in places like Washington, D.C.
While subsidies can help offset the high cost of child care, only approximately 15% of children whose families are eligible for subsidies receive them.
The federal government distributes subsidies to designated state agencies that are responsible for contracting with providers and verifying family eligibility. States must match some of these funds. Parents then apply through their state to receive a subsidy.
Families generally pay the rest of their child care center costs on a sliding scale.
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Getting a child care spot isn’t a guarantee
It can be difficult for families to apply for and receive child care subsidies. It requires extensive paperwork, and families often have to spend hours on the phone and deal with confusing instructions about how to receive the benefits.
In some states, there is a wait list to receive a child care subsidy.
In March 2026, Missouri started a child care subsidy waitlist. Before, families used to be able to receive child care subsidies immediately after approval, if they could find a provider. Now, families must wait until funding becomes available.
Providers may be reluctant to accept subsidies to help pay for a child’s care, in part because of the additional work of submitting a child’s attendance records to the state and verifying other information. Some providers simply cannot afford to gamble on delayed payments, which happened during the 2025 federal shutdown, for example.
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The math doesn’t work
The child care industry faces other challenges.
Despite some recent wage increases, child care workers are among the lowest-paid professionals in the U.S. They earn, on average, about $15 an hour, depending on where they live. They often do not receive other benefits like insurance or retirement.
Child care workers earn so little in part because child care centers typically run on thin margins. They often do not make a profit, unless they are part of a large, national chain, like Bright Horizons.
Most child care providers are small businesses, whether they are run out of a designated center or someone’s private home. Unlike K-12 public school districts, these child care providers typically do not receive any government funding.
If a child care provider raises the wages of child care workers too much, and subsequently increases its tuition rates, most families cannot afford to send their kids there – especially babies.
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