The Post-ARPA Reality for Childcare Providers
Between 2021 and 2023, the American Rescue Plan funneled $24 billion in Child Care Stabilization Grants directly to approximately 220,000 childcare programs. That money covered higher wages, rent, utilities, and operating costs for programs serving roughly 10 million children and families. It all expired September 30, 2023. No federal replacement program was created. The projected catastrophe of 70,000 program closures did not fully materialize, but the damage was real: Pennsylvania lost nearly 2,200 providers even while ARPA money was still flowing. North Carolina lost 41 programs in just the first three months of 2024. Nationally, providers chose between raising tuition 20-40% or closing. The One Big Beautiful Bill Act, signed July 4, 2025, made some adjacent changes to childcare economics. It raised the Dependent Care FSA limit from $5,000 to $7,500 and expanded the employer-provided childcare credit (Section 45F) from $150,000 to $500,000. These help families and employers. They do not replace operating grants to providers. If you run or want to start a childcare program, here is what actually exists in 2026.
CCDBG: The Main Federal Funding Stream
The Child Care and Development Block Grant is the largest federal program dedicated to childcare. The Consolidated Appropriations Act, 2026 (signed February 3, 2026) funds CCDBG at **$8.831 billion**, an $85 million increase over FY2025. CCDBG does not go directly to providers. It goes to states, which distribute it: - **At least 70%** must fund direct childcare services (subsidies for low-income working families) - **At least 9%** must go to quality improvement activities - **At least 3%** must target infant and toddler care quality - **No more than 5%** may cover state administrative costs Most states deliver subsidies through a **voucher/certificate system**: families receive a voucher and choose any eligible provider. Some states also use **grants and contracts** directly to providers, particularly for Head Start collaboration sites and licensed centers in underserved areas. The practical implication for providers: you receive CCDBG money by accepting families who hold childcare subsidies. The reimbursement rate your state pays per child varies enormously. New Mexico leads at $1,782 per child in federal subsidy. South Dakota is lowest at $482 — a nearly 4x gap. **How to participate:** Contact your state's Child Care and Development Fund (CCDF) Lead Agency (usually within the state Department of Human Services or Department of Education). You must be a licensed or legally exempt provider to accept subsidy-funded children.
🔍 Search related opportunities now
Head Start and Early Head Start: $12.4 Billion Under Stress
Congress funded Head Start at **$12.357 billion** for FY2026, an $85 million increase. Head Start serves more than 750,000 children from birth through age 5 across every congressional district in the country. But the program is under significant operational stress. **Five of ten regional offices were closed on April 1, 2025:** Boston, Chicago, New York, San Francisco, and Seattle. These offices collectively served nearly 800 grantees (41% of all grantees) and approximately 318,000 funded slots across 22 states and 5 territories. Approximately 100 Office of Head Start central staff were terminated as part of broader HHS workforce reductions. **Payment disruptions began April 2025:** The administration required grantees to justify line-by-line expenditures of already-awarded funding, including approved items like payroll and rent. Some grantees experienced delays that forced temporary closures and staff layoffs. Head Start operates through direct grants to local agencies (grantees), not through state block grants. You cannot simply "sign up" — you must be an existing Head Start grantee or apply when ACF's Office of Head Start opens a competition for a service area. Head Start service areas are recompeted every 5 years through the Designation Renewal System. If a grantee is designated for competition (for poor performance or other reasons), the service area opens up and new applicants can compete. **For existing providers who are not Head Start grantees:** The most realistic pathway is partnering with your local Head Start program to serve as a delegate agency or childcare partner. Contact your regional Head Start Collaboration Office to explore partnership opportunities.
Preschool Development Grants: 23 States Just Got New Awards
In January 2026, the Administration for Children and Families awarded **Preschool Development Grant Birth through Five (PDG B-5)** grants to 23 states. These competitive grants fund state-level early childhood system building: expanding access, improving quality, strengthening data systems, and supporting parental choice. Total PDG B-5 program funding for FY2026: **$315 million**. **FY2026 awards by state (selected):** | State | Amount | |---|---| | Arkansas | $14.75 million | | Florida | $14.75 million | | Maryland | $14.75 million | | Ohio | $14.75 million | | Oklahoma | $14.75 million | | Indiana | $14.68 million | | Louisiana | $13.72 million | | Wisconsin | $13.92 million | | Vermont | $12.71 million | | Connecticut | $11.95 million | | Delaware | $11.31 million | | Hawaii | $1.38 million | PDG B-5 money does not go directly to individual providers. States use it to build infrastructure: professional development systems, quality improvement frameworks, data integration, and expanded access pilots. However, these grants often create downstream funding opportunities for providers through state-administered sub-grants, training stipends, and quality improvement awards. **What to do:** If your state received a PDG B-5 award, contact your state's early childhood lead agency to learn what provider-facing programs it will fund. These are often announced 3-6 months after the state receives its award.
QRIS: The Funding Source Hiding in Your Quality Rating
Quality Rating and Improvement Systems operate in 44+ states. They link your program's quality rating to how much the state pays in childcare subsidies. This is not a grant you apply for — it is a reimbursement rate increase you earn by meeting quality standards. Higher-rated providers receive **5% to 40% above base subsidy rates** depending on the state. The differential is significant. **State-specific examples:** **Pennsylvania:** Annual quality achievement awards of $800 to $63,000 per program. Staff retention awards of $600 to $4,000 per staff member. Tiered reimbursement add-on of $0.50 to $2.00 per child per day at the highest levels. Time-limited improvement grants of $300 to $6,000. **Maryland:** 10% to 40% above base subsidy rate depending on star level. One-time accreditation grants of $200 to $1,000. One-time educator achievement awards of $200 to $1,000. **Ohio:** Annual quality achievement awards of $600 to $36,000 per program. 5% tiered reimbursement bonus at the top two rating levels. **California (Quality Start LA):** Quality Improvement Grants up to $4,000 for Tiers 1-3. Quality Achievement Awards of $6,000 (Tier 4) and $8,000 (Tier 5). **The math matters.** A Pennsylvania center with 20 subsidy-funded children that earns the top QRIS tier could generate roughly $10,000 in additional annual reimbursement revenue from the per-child add-on alone — on top of the annual achievement award of up to $63,000. Contact your state's QRIS administrator (usually within the early childhood office) to understand your current rating and what it would take to move up.
SBA Programs: Loans, Not Grants
The SBA has a dedicated childcare business hub at sba.gov/childcare, but it offers **loans and business support, not grants**. **SBA 7(a) Loans:** Up to $5 million for working capital, equipment, hiring, and facility renovations. For-profit providers only. Veterans receive reduced guaranty fees (see our veteran business guide). **CDC/504 Loans:** Up to $5 million in long-term, fixed-rate financing specifically useful for purchasing, renovating, or expanding a physical childcare facility. For-profit providers only. **Microloans:** Up to $50,000 (average loan: approximately $13,000). Terms up to 6 years, interest rates 8-13%. This is the **only SBA loan program open to nonprofit childcare centers**. Covers working capital, supplies, furniture, fixtures, and equipment. Does not cover real estate purchases. The SBA also connects childcare providers with free support through Women's Business Centers (WBCs), Small Business Development Centers (SBDCs), and SCORE mentors. These are genuinely useful for developing a business plan, understanding licensing requirements, and projecting costs before you open. For broader SBA program details, see our small business grants guide.
Private Foundations: What They Fund and What They Do Not
Major foundations invest heavily in childcare, but mostly at the systems level — not in individual provider grants. **W.K. Kellogg Foundation** has a dedicated Early Care and Education focus area. It funds national advocacy organizations, community-level quality improvement, and systems-change initiatives. Kellogg is primarily invitation-based for large grants. Individual childcare centers should not expect to apply directly. **David and Lucile Packard Foundation** funds early childhood systems through its Children and Families Initiative. As of early 2026, new Maternal and Child Health RFPs are expected March through June 2026. **Ford Family Foundation** (Oregon and rural West) offers grants up to $25,000 through its Open Grants program, with larger strategic funding available. Early childhood education is an explicit priority. A recent $250,000 grant went to Central Oregon Community College Foundation for expanded childcare. The honest pattern: most major foundations (Kellogg, Packard, Annie E. Casey, Robert Wood Johnson) fund organizations working on childcare policy and systems, not individual for-profit or nonprofit childcare providers directly. Foundations are better pathways for childcare resource and referral agencies, childcare workforce development organizations, and CDFIs that in turn finance providers. For more on foundation funding strategies, see our foundation grants guide. Nonprofit childcare organizations should also review our nonprofit grants guide.
CCAMPIS: College-Based Childcare Under Threat
Child Care Access Means Parents in School (CCAMPIS) grants go to colleges and universities — not directly to childcare providers — to support campus-based childcare for low-income student parents. The program serves approximately 3,000 students at more than 250 institutions. FY2026 funding: **$75 million** (the Senate prevailed over a House proposal to eliminate the program entirely). But the Department of Education declined to renew CCAMPIS grants for some colleges in the 2025-26 academic year, citing DEI concerns, and did not post a new competition cycle, leaving over 100 programs unable to compete for renewal. If you operate a campus childcare center, your institution must apply on your behalf. If you are a childcare provider near a college campus, explore partnership opportunities — some CCAMPIS grantees contract with local providers rather than operating centers directly.
Where to Start: A Realistic Path for Childcare Providers
The federal childcare funding picture is fragmented by design. Here is a practical sequence. **If you operate an existing program:** 1. Accept subsidy-funded children through your state's CCDF program if you do not already 2. Check your QRIS rating and determine what it would take to reach the next tier — the reimbursement increase often exceeds what small grants provide 3. Track your state's PDG B-5 implementation for new provider-facing sub-grants 4. If you serve a rural or underserved community, explore whether a USDA Community Facilities grant could fund facility improvements **If you want to start a childcare program:** 1. Connect with your nearest SBDC or WBC for free business planning support 2. Research your state's licensing requirements and QRIS standards before committing 3. Determine if your community qualifies as a childcare desert (insufficient supply relative to demand) — this strengthens applications for state and local grants 4. Consider the SBA Microloan program ($50,000 max) as startup capital 5. If you are a woman-owned or minority-owned business, see our women and minority business guide for additional programs The federal government has not replaced what ARPA provided. But between CCDF subsidies, QRIS reimbursement tiers, state grants, and SBA loans, there is a path — it just requires stitching together multiple smaller sources rather than relying on a single large grant.