Office of Child Care seeks comments on Child Care Development Fund rule recission

On January 5, the Office of Child Care released a notice of public rulemaking (NPRM) seeking comments on “Restoring Flexibility in the Child Care and Development Fund (CCDF).” The proposed rule would rescind four components of a final regulation completed in 2024 known as “Improving Child Care Access, Affordability, and Stability in the Child Care and Development fund.” The notice also includes a few specific areas where it is especially interested in field feedback. 

Access, affordability, and stability are critical to the school-age child care and afterschool field. Almost half of children served by CCDF funds are school-age. The CCDF funds are known by different names in each state but provide child care subsidy/scholarship dollars to low-income families for children ages 0-13. 

The proposed notice would:

• Repeal the federally mandated cap on family co-payments—set at 7% of a family’s income.

• Repeal the requirement to use some grants and contracts for direct services, specifically infants and toddlers, children with disabilities, and children in underserved geographic areas.

• Repeal the requirement to pay child care providers prospectively – in advance of or at the beginning of the delivery of service.

• Repeal the requirement to pay child care providers based on a child’s enrollment rather than attendance.

Recent America After 3PM data found that among parents across the country who want but don’t have access to afterschool programs, 56% cite affordability as a major barrier, and 42% cite lack of availability. The repeal of the 7% family cap could have implications for family affordability, especially if parents are asked to contribute more than they can manage, alongside other household expenses such as rent, groceries, and car payments. It’s also important to note that for parents and families struggling with accessibility, grants and contracts to programs -- especially in underserved areas, and for special populations -- offer much needed childcare.

The proposed changes to payment practices could also have implications for the field. A 2024 survey of afterschool providers found that 73% were concerned about their long-term funding and future. Payment practices that are aligned with  how most private pay providers are compensated (i.e. paying at the beginning of a week or month, and paying for a specific period of time rather than only after each day or unit of time of attended) help providers remain financially stable, and support providers’ decisions to participate in the subsidy program, which expands access and choices for families. 

The 2024 rule provided states with up to a 2-year waiver to begin to implement the components of the rule. The current NPRM suggests that states continue to struggle with the rule implementation and that the rescissions could save an up to an estimated $6.7 million annually across all states in compliance costs. The NPRM also argues that, while no longer mandatory, states will continue to have the flexibility to choose to meet the requirements under the former rule. The Afterschool Alliance submitted comments on the NPRM’s proposed rule rescission. 

The NPRM also asks commenters for specific ideas on:

1. If prospective pay is no longer required, what is a reasonable timeline for reimbursement? The deadline under the governing 2016 rule is 21 days.¹ 

2. If paying by enrollment is no longer required, what is a reasonable amount of attendance to secure full pay? The proposed rule suggests states could pay full payment if a child attended a minimum of 85% of the time or missed 5 or fewer days in a 4-week period.² 

We encourage all interested stakeholders, and especially providers who receive child care subsidy reimbursement from their state or might consider accepting child care subsidy in the future, to weigh in. 

As always, comments can be designed as a formal letter or can be written as a more casual but courteous note.  Any thoughtful response outlining your top priorities will be welcome. There is typically an opportunity to both submit and review comments on the same page; however, at this time, only the submission option is active. Comments, due February 4, can be sent electronically on the regulations.gov page.  

Encouragingly, both the 2024 Rule and this proposed rescission emphasize that family access and affordability, alongside provider stability, remain major challenges across the country and express an interest in supporting the field. 

In addition to the NPRM, the Federal government is currently finalizing its appropriations package for Fiscal Year (FY2026), and ensuring that child care and afterschool are well-funded and that resources are allocated in a timely manner, is another essential piece of the puzzle. Similarly, states are kicking off their annual budget processes, and many are considering the critical role these programs play in supporting the workforce, youth development, and family affordability in their communities. 

Both in this NPRM and beyond, we hope the field will continue to communicate the needs of families and providers to decision-makers and help design sustainable systems of youth development to expand access to every youth currently waiting. 

¹ On prospective pay the NPRM says: “We request comment on whether a different deadline, such as seven days or 14 days after receiving a completed invoice, would more effectively balance the need to provide Lead Agency flexibility while also supporting provider stability?”

² On pay by enrollment the NPRM says: "We are seeking comment on whether a different number of paid absences, such as 10 days instead of 5 days in a month, and/or different attendance rate, such as 75% of authorized time instead of 85% of authorized time, would increase child care provider participation in the CCDF program, while ensuring Lead Agency flexibility."