Beyond the Headlines

What the report says:

Child care and early learning funding across the U.S. is highly uneven and still not enough, with states investing anywhere from less than $500 to more than $5,000 per child, and some contributing nothing beyond minimum federal requirements. While some states have increased funding, the average is only about $1,700 per child, far below what is needed and still lower than K–12 spending levels. At the same time, families face average child care costs of over $13,000 per year, and the lack of affordable care costs the U.S. economy an estimated $172 billion annually. Overall, the report shows a system under strain and calls for stronger, more coordinated public investment to better support children, families, and the workforce.    

Katrina’s take:

The findings in this report (as well as recent analysis from First Focus on Children's Babies in the Budget and Center for Early Learning Funding Equity's Shortchanged Project) reinforce what families, providers, and communities have been experiencing for years: our early care and education system is not just underfunded, it is structurally imbalanced. When investment levels vary so widely by state, children’s access to quality care and learning depends more on geography than need, which is fundamentally inequitable. At the same time, the fragmentation across our early care and learning systems makes these challenges even harder to address. Funding streams are spread across agencies, and connections to health, family supports, and other services are often limited. This not only complicates equitable service delivery, it also makes it difficult to collect and interpret clear data on funding and outcomes. Greater integration across systems, and stronger connections to comprehensive services, are essential to ensure all babies and families receive the quality experiences they deserve. The United States is also out of step globally. Compared to peer nations, we invest far less in babies and young children, not only in early care and learning, but in the broader systems that support family well-being, including health and economic stability. This report makes clear that the consequences of that underinvestment show up everywhere: in high costs for families, low wages for educators, and limited access to quality care. What is particularly striking is that even the highest levels of state investment in early childhood still fall below what most states spend on K–12 education. That gap sends a clear signal about our priorities, despite decades of research showing that the earliest years are the most critical for development and long-term outcomes. As policymakers make decisions during federal and state budget cycles, this is a pivotal moment. Flat funding or cuts will only deepen the existing cracks in the system. Instead, we should be thinking about how to make sustained, strategic investments that lower costs for families, stabilize the workforce, and expand access to quality care. Babies and young children cannot wait. If we are serious about strengthening our economy and supporting families, early care and education must be treated as essential infrastructure and funded accordingly.

What the surveys say:

The National Association for the Education of Young Children (NAEYC) workforce survey of early childhood educators highlights a system under mounting financial and operational strain. Rising operating costs are driving tuition increases and contributing to program instability, even as a majority of leaders reported under-enrollment and greater family financial insecurity.

2,741 program leaders were asked: "Over the past year have the following facility and staff-related aspects of your program increased, decreased or stayed the same?" "I don't know" and "N/A" responses not include, thus some rows do not sum to 100%.

These pressures are not limited to center-based programs. The National Association for Family Child Care (NAFCC) Annual Survey reports that 71 percent of family child care providers work 50 or more hours per week, nearly half work more than 60 hours, and 35 percent report take-home pay below $10 per hour after expenses, underscoring the fragile business model across settings. 

In 2025, a large share of respondents report working well beyond standard fulltime hours each week.

While more than half of program leaders in NAEYC’s survey raised wages in 2025, attention to compensation has not been sufficient to stem staff turnover or ease recruitment challenges. Nearly a quarter (22 percent) of educators reported they are considering leaving the field within the next year, with many citing better wages and benefits as key factors.

The NAFCC report further notes that most family child care providers operate as sole proprietors without access to employer-sponsored health insurance, paid leave, or retirement benefits, and that the workforce skews older, raising additional concerns about long-term supply and succession. 

This chart pulls from two survey questions directed at program leaders. "Over the past year, have the following staff-related aspects of your program increased, decreased, or stayed the same?" and "Compared to this time last year, have you experienced more or less difficulty with any of the following aspects of your program?"

Program leaders also reported public funding stagnating or declining relative to need, and more than half of leaders reported that families had withdrawn due to lost subsidies or being unable to afford tuition. Another 57 percent said their trust in institutions has dropped over the last year. Subsidy rates frequently fail to cover the true cost of delivering quality care, forcing program leaders into difficult tradeoffs that affect both program sustainability and family affordability.  

Sarah’s take: 

This data reflects a system under sustained structural strain. Programs are absorbing higher operating costs without a corresponding increase in reliable public investment. When leaders raise tuition to remain viable, families struggle to afford care, enrollment becomes unstable, and workforce challenges intensify. Nearly one in four educators considering leaving the field is not simply a workforce issue. It is a warning about overall system stability. Family child care programs report similar pressures, including razor thin margins, fluctuating enrollment, and difficulty covering basic expenses despite long hours. Many communities are seeing more programs close than open, further limiting supply. 

From a policy standpoint, this reinforces a long-standing reality: the child care system cannot, on its own, deliver affordability for families, fair compensation for educators, and high-quality experiences for children. Without sustained public investment aligned to the true cost of quality, programs will remain fragile and educator attrition will continue. Family child care educators, many operating as sole proprietors without benefits or administrative infrastructure, face even greater vulnerability. Strengthening compensation strategies, reforming subsidy rates using cost-of-quality methodologies, and committing to predictable, long-term funding are essential to building a stable and equitable system. 

These surveys confirm what educators and leaders have navigated for years: a workforce model stretched beyond sustainable limits. Staffing shortages mean remaining teachers absorb additional responsibilities while managing their own financial uncertainty. Leaders face constant tradeoffs between affordability, compensation, and quality within a financing structure not designed for stability. In family child care, business risk and household income are directly linked, so enrollment dips or delayed subsidies immediately affect family stability. 

Over time, this strain accelerates burnout and pushes committed educators out of the profession. Burnout is not a resilience gap. It is a system design failure. If we want stability for children and families, we must build a financing structure that treats early educators as professionals, with compensation and supports aligned to the true cost and value of their work.