Childcare "Flexibility" Is a Trap Door—Here's What's Actually Happening to Your Subsidies

TL;DR

The Trump administration just proposed gutting four childcare protections that were added in 2024. They're calling it "state flexibility." It's actually a return to a system where poor families pay 20% of their income for care, small daycare providers go bankrupt, and kids with disabilities get shut out. The comment deadline is tomorrow (February 4). Yes, really.

Okay, Let's Unpack This.

In March 2024, the Biden administration did something radical: they actually protected working families and childcare providers. Not perfectly—nothing in this system is—but they put real guardrails on the Child Care and Development Fund (CCDF). Here's what they did:

• 7% family co-payment cap: Childcare subsidies couldn't cost families more than 7% of their income. (For context: families were paying 10-20% before this.)
• Prospective provider payment: Childcare providers got paid upfront or at the start of the month. Not months later, after they'd already spent their own money on supplies, staff, and rent.
• Enrollment-based payment: Providers were paid based on a child's authorized enrollment, not just the days they showed up. This meant providers could actually plan their budgets and keep staff employed.
• Direct services requirement: States had to use some CCDF funding to directly contract with community organizations to serve kids with disabilities, infants/toddlers, and kids in rural areas. (Not just vouchers—actual contracts.)

These weren't flashy policies. But they kept small daycare centers from going under. They kept poor families from choosing between childcare and rent. They made sure kids with complex needs didn't just... disappear.

Now? The Trump Administration Wants to Rescind All Four.

On January 5, 2026, HHS released a "Proposed Rule" titled Restoring Flexibility in the Child Care and Development Fund. (Yes, "restoring" is doing a lot of work in that title.) They're proposing to:

• Remove the 7% co-payment cap. States can now charge families up to 20% of income (or more, if they want).
• Remove the requirement for prospective provider payment. Back to reimbursement-only—meaning providers wait months to get paid.
• Remove the enrollment-based payment requirement. Providers only get paid for days a kid actually shows up, even if they're holding the slot.
• Remove the direct services requirement. States can go back to vouchers-only, which means kids with disabilities and in underserved areas get shut out.

(Shocker: All four of these protections are being rescinded by the same administration that's claiming to "unleash prosperity." Prosperity for whom, exactly?)

The Math Isn't Mathing.

Here's the thing: the administration's own numbers don't support this.

The projected "savings"? $6.1 million per year in perpetuity.

The CCDF budget? $12.3 billion.

We are talking about dismantling protections for 1.4 million children and 870,000 families to save a rounding error. A decimal point. The amount a mid-sized state spends on a single highway project.

But here's the real math—the one they're not advertising:

• For families: A mom making $30,000/year was paying ~$2,100/year in co-payments (7%). Under the new rules, she could pay $6,000+/year (20%). That's not "flexibility." That's a $4,000 annual tax on poor mothers.
• For small providers: Family daycare centers operate on razor-thin margins. The prospective payment rule kept them from going under. Revert to reimbursement? They'll fold within a year. We're talking about losing 20-30% of the childcare supply in rural and low-income areas.
• For kids: The direct services requirement meant guaranteed slots for kids with disabilities and in underserved areas. Without it? Those kids just... don't get services. Their parents stay out of the workforce. Generational poverty deepens.

The real transfer of money? From families and providers to... nowhere, actually. This isn't about "savings." It's about shifting the burden downward.

Why This Matters Right Now (Not Just in Theory)

You might be thinking: "Okay, Maya, but this is a proposed rule. It'll take months, right?"

Wrong. The comment deadline is tomorrow, February 4, 2026.

Yes, really. They gave 30 days for public comment on a rule that affects 1.4 million children and 870,000 families. (For comparison: the 2024 rule that added these protections had 60 days and over 1,600 comments.)

If this rule is finalized, it becomes effective 60 days later. By April, states will start rolling back protections. By June, small daycare providers will start closing. By fall, we'll see the first wave of families priced out of the childcare system entirely.

What to Do (Because Outrage Without Action Is Just Noise)

Step 1: Submit a comment by tomorrow, February 4.

Go to regulations.gov and search for docket number ACF-2026-0001 or RIN 0970-AD20. Click "Comment Now."

Here's a template script (copy, personalize, submit):

I am submitting this comment in opposition to the proposed rule "Restoring Flexibility in the Child Care and Development Fund" (RIN 0970-AD20).

The four protections added in the March 2024 final rule—the 7% co-payment cap, prospective provider payment, enrollment-based payment, and direct services requirement—are not "burdensome." They are essential.

The administration's own analysis shows that the projected savings ($6.1 million annually) represent a rounding error in a $12.3 billion program. These savings come at the direct expense of 1.4 million children and 870,000 families who depend on CCDF subsidies.

Removing the 7% co-payment cap will push families back to paying 15-20% of their income for childcare. Removing prospective payment will force small providers to operate on reimbursement-only, destabilizing the childcare supply. Removing the direct services requirement will eliminate guaranteed access for children with disabilities and in underserved areas.

This is not "state flexibility." It is a transfer of costs and risk to the families and providers least able to bear them.

I urge HHS to withdraw this proposed rule and maintain the protections added in 2024.

[Your name, state, and how CCDF affects you—whether you use it, work in childcare, or advocate for families]

Step 2: Call your state's CCDF administrator and your state legislators.

Even if the federal rule is finalized, states can choose to keep the protections. Tell them to do it. Here's the script:

"Hi, I'm calling about the proposed changes to the Child Care and Development Fund. I'm asking [your state] to oppose the federal deregulation and maintain the 2024 protections—the 7% co-payment cap, prospective provider payment, enrollment-based payment, and direct services requirement. These protections keep childcare affordable and keep small providers from going under. I need to know: will [your state] commit to maintaining these protections even if the federal rule changes?"

Step 3: Share this with your childcare provider, your mom friends, your union rep.

The comment deadline is tomorrow. If you know someone who uses CCDF, works in childcare, or runs a daycare center—send them this. They need to comment.

The Bigger Picture

This isn't just about childcare. It's about whether we believe that working families deserve protection or whether we believe that "flexibility" (for states and providers) is more important than stability (for families and kids).

The 2024 rule wasn't perfect. It didn't solve the fundamental problem: childcare in America is expensive, precarious, and underpaid. But it was a step toward treating childcare like the public good it actually is—not a luxury good for families who can afford it.

Rescinding these protections doesn't solve that problem. It just pushes it back onto the people with the least power to absorb it.

Now, what are we doing about it?

In solidarity and with a lot of coffee,
Maya