Why more than 400,000 kids are on waitlists for federal childcare assistance

A big reason for the queue is a lack of funding for subsidized childcare. Federal stimulus dollars had buoyed the childcare sector during the pandemic, Schulman said; now, that capital is gone. Roughly $39 billion from the American Rescue Plan went toward childcare, but states had to use the capital by September 2024. According to She, CCDF funding has been “stalling” over recent years.

Furthermore, childcare assistance programs are operated by states. It have different eligibility requirements for families and subsidy rates for providers. States can also decide whether to spend their Temporary Assistance for Needy Families (TANF) dollars on childcare, and Schulman stated some states facing budgetary pressures may have less of their own money to divert to assistance programs.

That creates a difficult math challenge for state officials. This person have to balance the number of families they serve with the amount they spend on care, remarked Jordan Pargeter, federal initiatives and strategic policy administrator in Oregon’s Department of Early Learning and Care.

“Is it better to serve more families but not help them very much with the cost of care?” Pargeter said. “Or is it better to serve less families but actually get closer to the true cost of care that providers are facing?”

Oregon established a statewide waitlist in 2023 that currently has around 26,000 children waiting to apply (though not all of them may be eligible). Certain priority groups, such as families in the state’s child welfare system, can bypass the waitlist. Beyond that, though, no families have come off the waitlist in nearly three years.

Alyssa Chatterjee, director of Oregon’s Department of Early Learning and Care, said Oregon pays childcare providers well and doesn’t require high co-payments from families. Co-payments in Oregon are typically just 2% to 4% of a family’s income, well below the 7% maximum allowed under a previous federal rule. It has meant that a smaller number of families is receiving a greater amount of financial aid.

“Oregon really has chosen to focus on maintaining that quality of programming that works well for providers and families by keeping those copays low, paying providers well,” Chatterjee said. “That means we have to serve fewer families with the resources available.”

Because of those financial pressures nationwide, the CCDF only reaches a fraction of the families it was designed for. The program has had one of the lowest participation rates among federal safety net programs, with just 22% of families who qualify under their state’s rules receiving assistance in a typical month.

This comes at a time when childcare costs are spiking nationwide. According to the group Child Care Aware of America, childcare costs increased 29% between 2020 and 2024.

‘It would definitely change a lot’

Parents with very young, pre-school aged children — for whom schooling is not yet an option — may be at a particular disadvantage.

Kim Kofron, executive director of early childhood education at Children at Risk, a Texas nonprofit that advocates for children, said waiting lists of even a few years can impact some families during a critical period when they need childcare.

“If you think about a child’s life in that zero-to-five space, a one- or two-year waiting list is a huge period of that time,” Kofron said.

There were more than 93,000 children on childcare assistance waitlists in Texas as of January 2025, according to the most recent data provided by the state.