Subsidy Policies for Child Care Affordability Vary Across States and Territories With Large Populations of Hispanic Families

Introduction

With more than 30 years of bipartisan support, the Child Care and Development Block Grant Act of 1990 (CCDBG), as amended in 2014,¹ is the main federal law governing child care programs that support families’ economic security and children’s learning and development. Through the Child Care and Development Fund (CCDF) program, state, territorial, and Tribal lead agencies receive federal CCDBG dollars to help subsidize eligible families’ child care expenses and improve the supply and quality of affordable care options in communities.

Child care that can adequately support parents’ employment and children’s development comes with substantial costs that often burden household budgets.^2,3 For many Hispanic^a families, who tend to have high levels of employment but low levels of income,⁴ child care expenses are a significant concern.⁵ In 2019, 1 in 4 Hispanic households with low incomes using child care spent an average of 30 percent of their income on care,⁶ well above the “affordability” threshold (≤7% of household income) recommended by the federal government.⁷

Under CCDBG law, lead agencies have considerable flexibility to design their CCDF programs within the parameters of federal regulations set forth in the CCDF Final Rule. These regulations include a combination of requirements, recommendations, and policy options, several of which address affordability. Drawing on data from Fiscal Year (FY) 2025-2027 CCDF Plans, this brief summarizes how lead agencies are currently implementing four policy strategies directly related to supporting child care affordability (see box) in 16 states and territories with large populations (i.e., greater than 100,000) of Hispanic children who live in households with low incomes (i.e., below 200% of the federal poverty level), who are thus likely eligible for subsidies (for brevity, we will sometimes refer to these as “Hispanic-populous states”).⁸ Together, these states and Puerto Rico are home to more than 80 percent of Hispanic children in U.S. households with low incomes.⁹

Findings

Of the states/territories with large populations of Hispanic children living in households with low incomes, just half (8 of 16) comply with federal limits on parent copayments set at 7 percent or less of households’ income (Figure 1). The lead agencies with maximum copayment amounts above the federal limit have requested a waiver to allow additional time to implement this new requirement.

Figure 1. Half of states/territories with large populations of Hispanic children meet the federal requirement by capping subsidy copayments for families at or below 7 percent of household income.
States categorized by family copayment threshold

Of the states/territories with large populations of Hispanic children in households with low incomes, relatively few (5 of 16) prohibit child care providers from charging additional fees to parents when subsidy payments are lower than providers’ prices (Figure 2). In many states/territories, family out-of-pocket costs for subsidized care may exceed the 7 percent limit—even when copayments are capped at this level—because of additional provider fees. Only 3 of the 16 lead agencies examined (those in New Mexico, Washington, and Puerto Rico) cap copayments at or below 7 percent of income and prohibit provider fees to support affordability for families.

Figure 2. A small set of states/territories with large populations of Hispanic children do not allow providers to charge families additional fees to cover the difference between subsidy payment rates and care prices.
States categorized by whether providers are allowed to charge families additional fees

States/territories with large populations of subsidy-eligible Hispanic children vary widely in how they decide to waive copayments for different groups of children and families (Figure 3); however, each state waives copayments for at least one group. Most lead agencies waive copayments for children in foster/kinship care and for those needing protective services, and roughly half waive copayments for families receiving Temporary Assistance for Needy Families (TANF) cash assistance and families experiencing homelessness. Families with incomes just above the federal poverty level, children with disabilities, and children enrolled in Head Start are currently exempt from copayments in 4 or fewer of the 16 states/territories.

Figure 3. All states/territories with large populations of Hispanic children waive parent subsidy copayments for one or more populations.
Number of Hispanic-populous states/territories that waive family copayments for certain populations

Of the states/territories with large populations of Hispanic children in households with low incomes, most (13 of 16) post information about sliding scale fees and parent copayments on their consumer education websites (Figure 4). To help potential subsidy applicants estimate their out-of-pocket costs for subsidized care, most—but not all—of the lead agencies included in this scan have made such information publicly available as required by federal regulations. Lead agencies not in compliance have requested a waiver to allow additional time to implement this new requirement.

Figure 4. Most states/territories with large populations of Hispanic children meet the federal requirement to post information about families’ share of child care costs on their consumer education websites.
States categorized by whether they publicly post information on families’ share of child care costs

Summary and Implications

More than 5.1 million Latino children younger than age 13 who live in households with low incomes reside in the 15 states and one territory included in this policy scan.⁸ As a significant share of families who are eligible for child care subsidies, many Hispanic families may benefit from the affordability-focused CCDF policy strategies reviewed here; however, the extent of these benefits will depend on multiple factors, including where in the United States a family lives.

In addition to variation among states and territories in setting CCDF policies and practices that shape who is eligible for CCDF subsidies and how easily families can navigate the application process, our scan reveals that Hispanic-populous states/territories vary in the combination of strategies they implement to support child care affordability for families receiving subsidies. While most lead agencies included in this scan meet the federal requirement to share information publicly to help families estimate their share of the costs of subsidized care, only half meet the required maximum limit on family copayments. In terms of policy strategies that are at the discretion of the lead agency, we find that most states/territories in this scan waive copayments for children in foster care or who need protective services, many waive copayments for families with very low incomes and those who are experiencing homelessness, and fewer than half currently exercise the option to prohibit additional provider fees for families receiving subsidies. Less common strategies implemented by only a handful of states include copayment waivers for families with incomes just above the federal poverty level (i.e., 100-150% of FPL), for children with disabilities or special needs, and for children enrolled in Head Start.

Importantly, CCDF policy strategies such as those examined here do not operate in isolation; rather, they are experienced in combination by families, providers, and the system. For example, low parent copayments may not ensure affordable care if providers charge parents additional fees when subsidy payments do not cover the cost of care. Lead agencies that permit providers to charge families the difference in rates describe this as a strategy to give families the widest set of care options. As one example of potential tradeoffs facing CCDF lead agencies, restricting providers from charging additional fees may impose a financial burden on them; such providers may, in turn, opt out of accepting subsidies.

Suggested Citation

Crosby, D., Wrather, A., Jacome Ceron, A., Mendez, J., & Omondi, F. (2025) Subsidy policies for child care affordability vary across states and territories with large populations of Hispanic families. https://doi.org/10.59377/519s5665p

Acknowledgements

The authors would like to thank the Steering Committee of the National Research Center on Hispanic Children & Families—along with Kristen Harper, Laura Ramirez, Katy Falletta, and Ana Maria Pavić—for their helpful comments, edits, and research assistance at multiple stages of this project. The Center’s Steering Committee is made up of the Center investigators—Drs. Natasha Cabrera (University of Maryland, Co-PI), Danielle Crosby (University of North Carolina at Greensboro, Co-PI), Lisa Gennetian (Duke University; Co-PI), Lina Guzman (Child Trends, PI), Doré LaForett (Child Trends, Co-I), Julie Mendez (University of North Carolina at Greensboro, Co-PI), and Maria Ramos-Olazagasti (Child Trends, Deputy Director and Co-PI)—and federal project officers Drs. Ann Rivera, Jenessa Malin, and Kimberly Clum (Office of Planning, Research and Evaluation).

This brief is supported by Grant Number 90PH0032 from the Office of Planning, Research & Evaluation within the Administration for Children and Families, a division of the U.S. Department of Health and Human Services totaling $7.84 million with 99 percentage funded by ACF/HHS and 1 percentage funded by nongovernment sources. Neither the Administration for Children and Families nor any of its components operate, control, are responsible for, or necessarily endorse this brief. The opinions, findings, conclusions, and recommendations expressed are those of the author(s) and do not necessarily reflect the views of the Administration for Children and Families and the Office of Planning, Research & Evaluation. For more information, please visit the ACF website, Administrative and National Policy Requirement.

Editor: Brent Franklin
Designers: Catherine Nichols and Joseph Boven

About the Authors

Danielle A. Crosby, PhD, is a co-principal investigator of the National Research Center on Hispanic Children & Families, co-leading the research area on early care and education. She is an associate professor in the Department of Human Development and Family Studies at the University of North Carolina at Greensboro. Her research focuses on understanding how policies and systems shape early education access and quality for young children in low-income families.

Amy Wrather, MS, is a doctoral student in the Human Development and Family Studies department at the University of North Carolina at Greensboro. She recently completed her Master’s degree in the same program. Her research interests focus on promoting high-quality learning environments for young children with disabilities across traditional and alternative models of early childhood education.

Anyela Jacome Ceron, MPS, is a graduate student in a Clinical Psychology program at the University of North Carolina at Greensboro. She received her Master’s degree from the University of Maryland, College Park in Clinical Psychological Science. Her research interests focus on the well-being of children and families and understanding risk and protective factors in the context of culture. She also has interests in family engagement in early care and education programs.

Julia Mendez, PhD, is a co-principal investigator of the National Research Center on Hispanic Children & Families, co-leading the research area on early care and education. She is a professor in the Department of Psychology at the University of North Carolina at Greensboro. Her research focuses on risk and resilience among low-income and Latino children and families, with an emphasis on parent- child interactions and family engagement in early care and education programs.

Favour Omondi, MS, is a doctoral student in the Human Development and Family Studies department at the University of North Carolina at Greensboro. She recently completed her Master’s degree in the same program. Her research interests focus on the multi-level factors that place young children at risk for maltreatment and the role of protective mechanisms (including access to high-quality early childhood education) in mitigating these risks.

About the Center

The National Research Center on Hispanic Children & Families (Center) conducts research to inform programs and policy to better serve Hispanic children and families with low incomes. Our research focuses on poverty reduction and economic self-sufficiency; child care and early education, including federal programs such as Head Start (HS) and the Child Care and Development Fund (CCDF); and cross-cutting topics that include parenting, family structure, and family dynamics. The Center is led by Child Trends, in partnership with Duke University, University of North Carolina at Greensboro, and University of Maryland, College Park.

Copyright 2025 by the National Research Center on Hispanic Children & Families.

Footnote

^a We use the terms “Hispanic” and “Latino” interchangeably throughout the brief. Consistent with the Office of Budget and Management’s (OMB) standards for data on race and ethnicity, these terms refer to individuals of Mexican, Puerto Rican, Salvadoran, Cuban, Dominican, Guatemalan, and other Central or South American or Spanish cultures or origins.