HHS Proposal Would Roll Back Child Care Affordability and Stability—Why Advocates Are Concerned
By Lee Johnson III, PhD, Early Childhood Education Senior Fellow
The Southern Education Foundation (SEF) recently submitted public comments to the U.S. Department of Health and Human Services (HHS) in response to a proposed rule titled “Restoring Flexibility in the Child Care and Development Fund (CCDF).” The proposal would roll back core federal protections finalized in the 2024 CCDF rule, which raises concerns for SEF about affordability, access, and the stability of child care for families and providers.
For decades, CCDF, a federal early childhood education program, has enabled families across the country to afford safe, high-quality early care and education for their children while parents work or attend school. The fund also supports parents’ participation in job training programs. Research shows that affordable early care and education benefits children, families, and the economy. These benefits include increased workforce participation and stronger long-term economic outcomes.
While SEF recognizes HHS’s intent to give states more administrative flexibility, the proposed changes raise significant concerns. These include the risk of reduced oversight, increased state-by-state discrepancies in care quality, and potential declines in support for families and providers, particularly in the South, where child care supply shortages, affordability challenges, and long-standing underinvestment are most acute.
One proposed change would remove the federal rule that family copayments must not exceed seven percent of household income. This standard, finalized in 2024, is backed by research showing that child care becomes unaffordable when families must spend a disproportionate share of their income on care. Without a clear federal cap, states could increase copayment expectations. Increased copayment expectations would put more financial strain on families least able to absorb it, making child care inaccessible for many and widening disparities in access across states, particularly harming those with lower incomes.
The proposal would also remove the requirement that states use grants and contracts to expand child care supply for infants and toddlers, children with disabilities, and families in underserved areas. Eliminating this requirement creates a key risk: in many Southern communities, especially rural and low-income areas, voucher-based systems alone have not built or sustained child care supply. Grants and contracts provide predictable funding to support staffing, facilities, and operations when the market fails to meet families’ needs. Without them, existing shortages in these regions may deepen, leaving vulnerable families with even fewer care options.
In addition, the proposed rule would roll back requirements for prospective payment and enrollment-based payments. These payment practices align with how the private child care market operates and help providers manage fixed costs such as payroll, rent, and insurance. Without them, providers may face delayed or unpredictable payments, discouraging participation in subsidy programs and limiting families’ real choices for care.
Currently, only a small share of eligible children nationwide receive CCDF assistance. Without increased funding, removing these protections risks forcing states to make difficult trade-offs, cut support, reduce reimbursement rates, or expand waitlists, especially in the South, where child care deserts persist. Clear federal standards have long helped ensure that CCDF advances its statutory goals of affordability, access, and stability. Rolling back federal standards risks reversing recent progress and exacerbating inequities across states and communities.
SEF urges HHS to reconsider these proposed changes and preserve the core protections finalized in the 2024 CCDF rule to strengthen the child care infrastructure on which working families and the economy depend.