Press Releases

Current State Subsidy Policies Far Below Market Prices for Child Care

September 19, 2012

Parents Struggle to Access Licensed Care with Taxpayer Dollars

Arlington, VA-- The cost of child care throughout the nation far exceeds subsidies that states provide to parents to find child care according to a white paper released today by Child Care Aware® of America. “Child Care Subsidy Policy: Access to What?” provides an overview of the reality parents face in finding child care under current state assistance approaches.

The report shows that only five states use a current market rate survey (from 2010 or 2011) to set child care subsidy rates. Twenty-three states set rates based on market rate surveys conducted between 2007 and 2009. Nineteen states set rates based on surveys conducted in 2006 or earlier – with six states using a survey at least 10 years old.

“Parents want their children to be safe. They want their children in a setting to promote their healthy development so that they start school ready to learn,” said Ollie M. Smith, Interim Executive Director of Child Care Aware® of America. “Many children with working mothers spend 35-40 hours a week in child care. Parents know how important a child care setting is to their child’s well-being.”

Nearly 20 percent of children (about 322,000) throughout the country whose care is paid for with taxpayer dollars through the Child Care and Development Block Grant (the federal law that allocates funds to states and sets the framework for state laws) are in unlicensed care. In 10 states, 30 percent or more of the children whose care is paid for with taxpayer dollars are in unlicensed care.

“With unlicensed care, there is no training required – not even CPR, no minimum health and safety protections for children, no background checks, no monitoring,” said Smith. “While some child care providers may be excellent, it’s really a roll of the dice.

“The law is supposed to offer parents choices among child care providers. But, parents are priced out of the licensed care market when the subsidies they receive to find child care are far below market prices,” said Smith. “That’s not a choice. That can be a parent’s nightmare – having to choose between going to work to make ends meet and finding quality child care so that they don’t worry about their children while they are at work.”

According to the report, current state subsidy strategies have little to do with the real cost of care that parents face in the community. “It is time to reauthorize CCDBG and move toward a policy that works to both support parents in the workforce and support children’s safety and healthy development,” said Smith. “These should not be mutually exclusive goals.”

Child Care Aware® of America recommends that Congress:

  • Task the National Academy of Sciences with reviewing and recommending alternative financing options to promote affordable, quality child care;
  • Set clear expectations about what quality means and establish a floor for what is minimally acceptable;
  • Require states to not only conduct biennial market rate surveys, but to use them in setting subsidy levels to ensure that families have real choices in their community;
  • Require states to tier subsidy reimbursement based on quality indicators or quality rating systems so that higher rates of reimbursement are available for higher quality care.

To read a copy of Child Care Subsidy Policy: Access to What?” and review all of Child Care Aware® of America’s recommendations, visit

Child Care Aware® of America (formerly NACCRRA), is our nation’s leading voice for child care. We work with more than 600 state and local Child Care Resource and Referral agencies to ensure that families in every local community have access to quality, affordable child care. To achieve our mission, we lead projects that increase the quality and availability of child care, offer comprehensive training to child care professionals, undertake groundbreaking research and advocate for child care policies that positively impact the lives of children and families. To learn more about Child Care Aware® of America and how you can join us in ensuring access to quality child care for all families, visit