The Trump administration has proposed repealing a key child care rule established during the Biden era, which aimed to bring stability to child care funding. This rule, finalized in 2024, mandates that states pay child care subsidies based on enrollment rather than attendance, a change that could significantly impact providers like Michelle Wright, who owns Michelle’s Place Child Care Center in southwestern Illinois.
Wright has faced numerous challenges in maintaining her two locations across the Mississippi River from St. Louis. Seasonal illnesses and inclement weather often lead to decreased attendance, affecting her bottom line. “That staff comes ready to work… and then six kids are out and I know the numbers are down,” Wright explains, highlighting the precarious nature of funding in her sector. In Illinois, child care subsidies are contingent on attendance, meaning that when attendance drops below 70%, providers risk losing income.
Approximately 90% of the families Wright serves receive child care subsidies, which are critical for her business model. Providers such as Wright rely on state payments made after care is provided, unlike families who pay tuition upfront and guarantee income for the providers regardless of attendance.
In response to the challenges faced by child care providers, the Biden administration established the new rule to offer more predictability. By requiring states to pay subsidies based on enrollment, it aimed to alleviate some of the financial uncertainty that providers like Wright encounter. While several states have adopted this model, others, including Illinois, have sought waivers to delay compliance.
The proposed repeal by the Trump administration follows allegations of fraud within the Child Care and Development Fund, which supports around 1.4 million children across the United States. These allegations gained national attention after a viral video surfaced in December 2023, prompting calls from the Trump administration to halt subsidies in five Democratic-led states, although legal challenges have paused these efforts for now.
In a video announcement, Jim O’Neill, the former deputy secretary of the Department of Health and Human Services, stated that the up-front payment requirement introduced vulnerabilities. He claimed that such policies weakened accountability and increased the risk of fraud, despite the low payment error rate of less than 4% reported by the Administration for Children and Families.
Child care advocates worry that a focus on fraud could hinder the progress made in stabilizing the industry. Bipartisan support for child care reform has emerged, particularly since the onset of the COVID-19 pandemic. Many Republican-led states, recognizing the economic importance of child care, have begun to implement changes that align with the Biden administration’s rule.
In Missouri, for example, the Republican-controlled legislature passed a measure to shift child care subsidies to advance payments based on enrollment. The state is currently beta testing this system but has acknowledged the need for additional time to ensure its effectiveness and secure long-term funding.
Casey Hanson, deputy director of the advocacy group Kids Win Missouri, emphasized the significance of these changes for childcare providers. “It’s the way providers are paid in the private market. It’s how we’re going to create a more sustainable system,” she stated, acknowledging the financial strains that such reforms may place on state budgets.
Denise Wiese, executive director of the Lemay Child and Family Center in St. Louis County, echoed the necessity of supporting high-quality child care providers. “We have to take care of the children in our communities,” she remarked, expressing the long-term vision of nurturing the future leaders of the state and country.
As discussions continue regarding the Trump administration’s proposed repeal, the future of child care funding remains uncertain. The outcome of these policy changes will significantly affect providers like Wright and the families who rely on their services.
