The Biden Administration announced Thursday a new rule that would reduce childcare costs for more than 100,000 families.
The rule makes fixes to the Child Care and Development Fund, which serves an average of 1.3 million children every month, and will mainly help families that are already receiving childcare subsidies while also expanding access to aid for others.
The directive comes amid rising childcare costs nationwide. In September, $24 billion in pandemic-era childcare investments under the American Rescue Plan ended, which advocates warned would increase the financial burden on both providers and families. In New York City, 80% of families cannot afford care for a single child, according to a report by public policy think tank 5BORO Institute.
“We have an opportunity to make improvements for child care providers, who do the critical work of caring for our youngest learners and supporting working families,” said Ruth Friedman, Director of the Office of Child Care, in a press release. “When child care providers are financially healthy, the whole community benefits.”
The new rule officially goes into effect on April 30, though states will have more khbrknews to fully implement the changes. Here’s what to know.
Copay caps
The rule change is designed to help working-class families, some of whom are already receiving subsidies for childcare. The regulations will require states to charge a cap of 7% of a family’s income as a copay.
The federal standard for affordability says that childcare for one child should cost about 7% of a total household income, according to the U.S. Department of Health and Human Services. However, a 2024 Care survey found that families spend an average of 24% of their household income on childcare.
Many states have already capped copays, according to Anne Hedgepath, chief of policy at Childcare Aware of America. However, this rule change encourages states to eliminate copays for families who have a child with a disability, children in…
