Federal child care freeze brings new challenges for parents of school-age children

Update: January 28, 2026: According to reports from Child Care Aware of America, state administrative agencies have now received notice of the additional requirements under the "Defend the Spend" System. Additionally, in 5 states (Minnesota, California, Colorado, Illinois, and New York), the U.S. Department of Health and Human Services has frozen multiple child care and family assistance grants, including CCDF grants, Temporary Assistance for Needy Families (TANF) and Social Services Block Grant Funds (SSBG). It is not clear why those specific states were selected. HHS suggests funds will be restored after the Administration of Children and Families completes a review of compliance. On January 8, the funding freeze for the 5 states was challenged in federal court, the following day the judge ruled the administration was required to fund programs and protect the status quo for a minimum of 14 days as the case proceeds. On January 23 at the expiration of the 14 day restraining order, another judge extended the order until February 6. States should be able to access funding until at least that time when a ruling is expected.

The new year began with press coverage of the Department of Health and Human Services’ (HHS) announcement of a freeze on federal Child Care and Development Funds (CCDF).

The Child Care and Development Fund, also known as the Child Care and Development Block Grant, provides more than a million children (ages 0-13) nationwide with access to affordable child care while their parents work.

Information appears to have been largely disseminated in the form of social media posts. The posts, by Deputy Secretary HHS Jim O’Neill, indicate the Administration for Children and Families (ACF) has, “activated our Defend the Spend system for all ACF payments… All ACF payments across America will require a justification and a receipt or photo evidence before we send money to a state.”

Nationally, 44% of children served with the CCDF funds are school-aged (5-13). These funds support essential child care for families, without which many parents would likely have to reduce hours, or leave careers—decisions that critically affect household budgets in the short- and long-term, as well as the overall well-being of young people. Recent survey findings show parents are in dire need of afterschool programs, with 23 million children who are waiting for access to programs. Providers are operating on the margins, struggling with increased costs from rent, insurance, and supplies, and are challenged by staffing challenges including staff burnout, competition from higher-paying industries, and low staff pay, as they aim to keep prices affordable for families.

Deputy Secretary O’Neill, in his post, links the origin of the nationwide funding freeze to fraud allegations made in a recent video posted on YouTube. The federal government has not publicly confirmed any of the allegations. The Administration of Children and Families is working with reduced staff compared to a year ago this time, with at least 500 civil servant staff fired between January and April last year and the closure of 5 of ACF’s 10 regional offices. ACF, through ChildCare.Gov has posted the state websites where reports of fraud can be submitted.

Despite the news reports, as recently as January 5, some state administrative agencies are reporting that they have not received official notice from the U.S. Department of Health and Human Services.

The full implications of the announced freeze and related policy changes is still in flux. While next steps are determined, we hope all CCDF supported school-age youth are able to continue to access afterschool and summer programs that support their learning and development while their parents work.

We will continue to provide updates as more information becomes available. If you, your program, or families in your area are impacted, please let us know.