Child care and early education are essential for children and families to thrive. Families need affordable and accessible child care to ensure that children can grow and develop and that parents can pursue opportunities for work, education, and training. Child care also supports the current and future workforce, and therefore is crucial to the nation’s economic growth and well-being. Yet, child care is vastly underfunded and undervalued in the United States. As a result, families struggle to access affordable, high-quality child care, while child care workers are left underpaid and overburdened.
The child care sector experienced some relief following the enactment in March 2021 of the American Rescue Plan Act (ARPA), which provided $24 billion in stabilization grants for child care programs and $15 billion to supplement the existing federal Child Care and Development Block Grant (CCDBG) program, which provides funds to states to help low- and moderate-income families afford child care and invest in the supply and quality of child care. However, with the last of this temporary federal pandemic relief funding expiring as of September 2024, many states have found their budgets stretched thin, pushing them to make cuts to their child care programs. Furthermore, as a result of massive federal funding cuts to programs such as Medicaid and the Supplemental Nutrition Assistance Program (SNAP) contained in the budget measure enacted in July 2025, states may be forced to shift their resources to fill gaps in these programs, further depriving child care of funding.
Amid these challenges, many states still made gains in the 2025 legislative session, adopting policies and allocating funding to expand families’ access to child care and early learning opportunities and better support the child care workforce, as shown in the state-by-state summaries in this report. Several states provided funding to increase early educators’ wages and benefits and/or enable early educators to receive help paying for child care for their own children. A number of states expanded eligibility for child care assistance so that more families can receive help paying for care and/or reduced copayments for those families receiving help. Many states enacted tax credits for employers that provide child care to their employees, while other states expanded their prekindergarten programs. A few states created new funding sources for child care and early education.
However, not every state had success this year, as several missed opportunities to increase funding or approve legislation to better support families, child care programs, and early learning educators—and some states reduced funding for early care and education. Further sustainable, long-term investments and policy improvements across all states, accompanied by significant federal investments, are necessary to create a child care system that works for all families, children, and child care providers.