North Carolina, January 7, 2026
Reports regarding a possible nationwide freeze on federal child care funding have raised alarm among providers and families in North Carolina. While state officials have confirmed that no official notice has been received, the potential disruption underscores the importance of the Child Care and Development Fund (CCDF) program. This funding helps low-income families afford child care, enabling them to work and pursue education. The potential freeze could exacerbate existing challenges in North Carolina’s child care landscape, already impacted by the recent expiration of federal stabilization grants and ongoing financial strains.
Charlotte: Uncertainty Surrounds Child Care Funding Amid Nationwide Freeze Reports, North Carolina Officials Confirm No Direct Notice
Reports of a potential nationwide freeze on federal child care funding have created significant concern among child care providers and families across the country, though North Carolina officials confirmed on Monday, January 5, 2026, that the state has not received official notification of such an action. The reported federal funding freeze, specifically targeting the Child Care and Development Fund (CCDF) program, is linked to ongoing fraud investigations, particularly in Minnesota. Despite the lack of direct notice, the possibility of a halt in funds has underscored the critical importance of these programs for maintaining child care services and supporting working families in North Carolina and nationwide.
Impact and State Response
The CCDF program plays a vital role by assisting low-income families with child care expenses, thereby enabling parents to participate in the workforce or pursue educational opportunities. States utilize these federal funds to reimburse child care providers, subsidize care costs for eligible families, and uphold basic safety and quality standards in child care facilities. Local child care provider Bregenia Hill-White emphasized the potential devastation for North Carolina parents and providers if funds were frozen, even for a short duration, highlighting the program’s crucial role in family stability.
North Carolina Attorney General Jeff Jackson clarified on Monday, January 5, 2026, that the state’s system for issuing subsidy payments to child care providers operates only after attendance is submitted. This operational method means North Carolina would not be impacted by a recently announced federal closure of a “Biden-era loophole” that permitted some states to issue payments before verifying children’s attendance. Attorney General Jackson reaffirmed his office’s dedication to aggressively prosecuting fraud within these systems, asserting that misappropriation of taxpayer money ultimately harms children and families.
Broader Child Care Funding Challenges in North Carolina
The recent reports of a potential federal freeze add another layer of complexity to North Carolina’s already strained child care landscape. The state has been navigating the expiration of federal Child Care Stabilization Grants, which were initially provided through the American Rescue Plan Act of 2021 (ARPA) as a response to the COVID-19 pandemic. These one-time federal funds concluded in June 2024.
To mitigate the immediate impact, North Carolina lawmakers approved state stopgap funding amounting to $67.5 million. This allocation extended the compensation support component of the stabilization grants at a reduced rate from July through December 2024. An additional $33.75 million was then provided to continue this reduced compensation support through January-March 2025. However, since the end of March 2025, no further federal or state funds have been appropriated specifically to stabilize North Carolina’s early childhood education programs.
The cessation of these stabilization grants has placed numerous child care centers at risk. Many facilities face the difficult prospect of closure, increasing tuition fees for families, and struggling to recruit and retain qualified staff due to historically low wages. North Carolina experienced a net loss of 116 child care centers in the year leading up to September 2024. Since January 2020, the state has seen an overall net loss of almost 9% of its licensed child care programs. This reduction in available child care options has direct consequences for families; a 2023 survey revealed that 35% of North Carolina parents who encountered employment disruptions in 2024 attributed their departure from the workforce to child care challenges. The overall child care gap in the state contributes to an estimated $5.65 billion annual loss for North Carolina’s economy.
Long-Standing Challenges and Proposed Solutions
The current child care situation in North Carolina reflects a long-standing issue, with public funding for child care remaining stagnant for a decade prior to the pandemic. The costs associated with child care in North Carolina are notably high, with infant care often exceeding the cost of in-state tuition for a four-year public college. The average cost for center-based child care in the state was reported at $9,916, which is 25% higher than the national average.
Despite these high costs for families, child care providers frequently operate on narrow profit margins, making it challenging to offer competitive wages necessary to attract and retain staff. For instance, in 2021, the median hourly wage for child care teachers in North Carolina was $12.87, which was lower than the median wage for retail workers. The shortage of affordable, high-quality child care profoundly impacts workforce participation and overall economic activity, potentially costing North Carolina billions in economic output each year.
Various stakeholders are actively seeking solutions. Governor Stein’s Task Force on Child Care and Early Education, for example, has proposed recommendations such as establishing a statewide floor for child care subsidy reimbursement rates and exploring options to make child care workers eligible for child care subsidies themselves. These efforts aim to create a more sustainable and accessible child care system for all North Carolinians.
Frequently Asked Questions (FAQ)
- What is the latest news regarding federal child care funding?
- Reports emerged about a potential nationwide federal funding freeze for child care services, specifically the Child Care and Development Fund (CCDF) program, linked to fraud investigations.
- Has North Carolina received official notice of a federal child care funding freeze?
- North Carolina officials, including Attorney General Jeff Jackson and NCDHHS Secretary Dev Sangvai, stated on Monday, January 5, 2026, that the state has not received official notice from the federal government about this action.
- How does North Carolina’s subsidy payment system work?
- North Carolina issues subsidy payments to child care providers only after attendance is submitted. This means the state would not be affected by a federal closure of a loophole that previously allowed payments before proof of attendance.
- What is the purpose of the Child Care and Development Fund (CCDF) program?
- The CCDF program helps low-income families pay for child care, enabling parents to work or attend school. States also use these funds to reimburse providers, subsidize care costs, and ensure basic safety standards.
- What is the status of federal Child Care Stabilization Grants in North Carolina?
- Federal Child Care Stabilization Grants, from the American Rescue Plan Act of 2021, ended in June 2024. North Carolina lawmakers provided state stopgap funding for compensation support through December 2024 and then through January-March 2025 at a reduced rate. No new federal or state funds have been allocated to stabilize North Carolina early childhood education programs since the end of March 2025.
- What are the economic impacts of child care challenges in North Carolina?
- The child care gap contributes to an estimated $5.65 billion annual loss for North Carolina’s economy. A 2023 survey indicated that 35% of North Carolina parents who experienced employment disruptions in 2024 left the workforce due to child care issues.
Key Features of Child Care Funding Challenges in North Carolina
| Feature | Description | Scope |
|---|---|---|
| Reported Federal Funding Freeze (CCDF) | Reports of a potential nationwide freeze on federal Child Care and Development Fund (CCDF) payments due to fraud investigations. | Nationwide |
| North Carolina Official Notification | North Carolina officials stated on January 5, 2026, that the state has not received official notice of the federal funding freeze. | State-level (North Carolina) |
| North Carolina Subsidy Payment System | North Carolina issues child care subsidy payments after attendance is submitted, preventing impact from a loophole closure allowing prior payments. | State-level (North Carolina) |
| Expiration of Federal Stabilization Grants | Federal Child Care Stabilization Grants, from the American Rescue Plan Act of 2021, ended in June 2024. | Nationwide (grants originated federally, but impact is state-level for NC) |
| State Stopgap Funding (NC) | North Carolina lawmakers provided state funding to extend compensation support components of stabilization grants through March 2025 at a reduced rate. | State-level (North Carolina) |
| Child Care Program Closures | North Carolina has seen a net loss of 116 child care centers in the year leading up to September 2024, and almost 9% of programs since January 2020. | State-level (North Carolina) |
| Economic Impact | The child care gap contributes to an estimated $5.65 billion annual loss for North Carolina’s economy, with 35% of parents leaving the workforce due to child care issues in 2024. | State-level (North Carolina) |
| High Child Care Costs | Infant care in North Carolina often costs more than in-state tuition for a four-year public college, and the average center-based care cost ($9,916) is 25% higher than the national average. | State-level (North Carolina) |
Deeper Dive: News & Info About This Topic
HERE Resources
Challenges Ahead for Charlotte-Mecklenburg Schools
North Carolina Recognized as Top State for Workforce Development
New State Laws in North Carolina Amid NFL Allegations
Block Love Charlotte Supports Vulnerable Populations This Christmas
Columbia’s Path to Economic Growth Through Private Investment
Charlotte’s Civic Heart: A Holiday Model for Community Growth
Charlotte and Gastonia Face Multiple Incidents Amid State Concerns
Charlotte Faces Educational Staffing Adjustments Amidst Enrollment Decline
Charlotte-Mecklenburg Schools Sees Enrollment Surge
Governor Restores Medicaid Rates in North Carolina
Author: HERE Charlotte
The CHARLOTTE STAFF WRITER represents the experienced team at HERECharlotte.com, your go-to source for actionable local news and information in Charlotte, Mecklenburg County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Lovin' Life Music Festival, Charlotte Pride festival, and major sporting tournaments at Bank of America Stadium. Our coverage extends to key organizations like the Charlotte Regional Business Alliance and Foundation for the Carolinas, plus leading businesses in finance and entertainment that power the local economy such as Bank of America and NASCAR. As part of the broader HERE network, including HEREAsheville.com, HEREGreensboro.com, HERERaleigh.com, and HEREOBX.com, we provide comprehensive, credible insights into North Carolina's dynamic landscape.
