Child Care Subsidy Changes Raise Concerns for Families and Providers

Fri Jan 09 2026 03:31:08 GMT+0200 (Eastern European Standard Time)

As the Trump administration increases scrutiny on federal child care funds, families like the Pallums fear losing support critical for their financial stability and child care access.

The Trump administration's heightened requirements for states to verify federal child care funds has led to anxiety among families and child care providers. Charity Pallum and her husband face potential employment challenges for their twins if subsidies disappear. The crackdown affects millions of children, with providers warning of dire consequences from new regulations amidst ongoing struggles within the industry.

Charity Pallum, a teacher in Ada, Minnesota, and her husband, who works at a car dealership, are finding it difficult to afford child care for their 1-year-old twins, even with two incomes. Thankfully, federal child care subsidies have allowed them to both work full-time. However, the Trump administration's decision to increase reporting requirements for states accessing the Child Care and Development Fund threatens their stability.

The $12 billion fund supports low-income families, covering care for about 1.4 million children. With new obligations citing alleged fraud concerns, families like Pallum's dread losing necessary aid. If such funding were to dwindle, it could push Pallum's husband to the brink of unemployment, directly impacting their household finances.

We’re just going to see how this goes, Pallum reflects on her uncertain future. The changes have prompted fear across the child care landscape. States like Minnesota, which support child care initiatives, might cushion the potential blow, but the impact remains murky.

Heightened Scrutiny Sparks Anxiety in Child Care Industry

Recent announcements by the U.S. Department of Health and Human Services require state officials to submit more extensive documentation to access child care funds. Following these mandates, five states led by Democrats—California, Colorado, Illinois, Minnesota, and New York—will face additional vetting for federal assistance, with potential withholding of other benefits, including Temporary Assistance for Needy Families.

Frustration is palpable among providers, who have already been navigating tight margins and extensive oversight. Jeanie Harris, executive director at First Learning, highlighted the precariousness of the child care funding structure, emphasizing that any reduction could topple their operations. We’re always living on the margins, and any hit to our reimbursements is going to be a house of cards, she explained.

In a system already plagued by burdensome regulations, the additional scrutiny raises the stakes, making some providers contemplate whether the effort to accept subsidized children is worth it. Dawn Uribe, who runs a preschool, noted the extensive compliance efforts already in place; a single misstep can lead to long payment delays.

Karen DeVos, another provider in rural Minnesota, is preparing staff for the possibility of surprise audits. She warned of the stress that comes with the constant threat of being viewed as potentially fraudulent: There is only so much stress that people can take... it’s terrifying.

For families like the Pallums, the loss of support means risking paychecks and jeopardizing their ability to fulfill parental responsibilities. We can give our twins a consistent schedule, which is crucial for their well-being, said Pallum. Without assistance, their dreams of balancing work and family could be pushed out of reach.