Families Locked Out of Child Care Subsidies Suffer While On Waitlists

Millions of low-income kids across the country are eligible for child care subsidies yet can’t access them because of extensive waitlists and underfunded programs. A new Brookings study measures the impact in one state — Virginia — and finds that while many families await the funding, they experience significant stress and harm.

Nearly half of those surveyed reported leaving their jobs to provide child care, 80% experienced food insecurity and just over half worried that their child was missing out on care that is safer or more welcoming. This was especially true for kids with disabilities.

The research is particularly relevant given the federal government’s recent attempt to freeze $10 billion in social service funds to five Democratic-led states, including at least $2.4 billion in child care subsidy funding.

Daphna Bassok, the report’s author and an education and public policy professor at the University of Virginia, said if the funding to the five states were to disappear overnight, the impacts would be “pretty dire” and quickly felt.

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“The findings highlighted just how meaningful these resources are for families. This is not help around the edges or help just to make things a little better,” she said. “The results suggest they are driving families’ abilities to work and go to school and do basic things, as well as children’s ability to go to child care centers.”

On Jan. 6, the Department of Health and Human Services announced it was halting billions in child care and family assistance funds to California, Colorado, Illinois, Minnesota and New York, alleging “serious concerns about widespread fraud and misuse of taxpayer dollars in state-administered programs.”

Within days, the attorneys general for all five states sued, claiming the move was “cruel,” unconstitutional and would lead to immediate and devastating impacts. A federal judge has since issued two temporary restraining orders, halting the freeze through Feb. 6. 

Three key programs serving particularly vulnerable children and their families hang in the balance: the Child Care and Development Fund ($2.4 billion), the Temporary Assistance for Needy Families ($7.35 billion) and the Social Services Block Grant ($869 million).

The Child Care and Development Fund is the main federal grant program allowing states to assist low-income working families with child care, and even before the attempted freeze the need was greater than what the dollars were able to support, according to Julie Kashen, the director of Women’s Economic Justice at The Century Foundation. 

“It is a program that has long been starved,” she said.

The move by HHS to cut off funds to the five states followed a conservative YouTube personality alleging widespread fraud in child care centers in Minnesota. A state report from 2019 did find significant weaknesses in anti-fraud controls, vulnerabilities that were addressed by new legislation and increased oversight. Separate and highly publicized instances of substantial fraud in a Minnesota child nutrition program during the pandemic have since led to dozens of criminal charges. The more recent allegations made via viral video have so far proven to be unfounded.

Some 12.5 million children are eligible for the subsidies based on federal guidelines, yet only about 2 million received them in 2019, covering just 16%, according to a 2023 GAO report. Between July 2024 and May 2025 in Virginia alone, almost 19,000 families who applied for a subsidy were placed on a waitlist.

Brookings researchers collaborated with the Virginia Department of Education to survey these families. They received responses from 6,548 (35%) of them between August and September of 2025, making it one of the largest studies to date looking at the experiences of eligible families missing out on subsidies. At the time of the survey, 67% of respondents were still awaiting the benefits, while 33% had made it off the waitlist and were receiving funds.

The vast majority of surveyed families still on the waitlist reported significant impacts to their employment as a result, with 76% saying they worked less than desired, 71% saying they turned down additional work or a promotion and 64% saying they reduced work or school hours to provide care. Nearly half had left their jobs altogether.

In open responses, parents described the financial bind they were in: each needed child care to work but, without subsidies, also needed work to afford child care.

“So many of these families felt trapped in this cycle,” said Bassok.

One parent wrote: “I feel like I can’t commit to any plans or ideas about the future months or year until I know if my daughter can go to daycare because we simply cannot afford the rates without subsidy.”

This challenging loop could be exacerbated if HHS is allowed to proceed: The Century Foundation has estimated that if child care providers in the five states are forced to shutter because of withheld federal subsidies, it could impact more than 500,000 children, cost more than $400 million annually in lost parental earnings and could drive 156,000 moms of young children out of the workforce.

It’s not clear what will happen once the temporary halt lifts on Friday; the judge is currently considering a request for a temporary injunction, which would secure the funding while the underlying case is litigated.

For now, the families who eventually made it off the waitlist in Virginia are faring significantly better: nearly two-thirds reported they were able to increase work or school hours, start a new job, or accept a promotion or new position as a result. In all, those still awaiting funds were twice as likely to remain unemployed as those who received them, a difference Bassok described as “massive.”

Those still on the waitlist were also 11 percentage points more likely to experience food insecurity (80% vs. 69%); 15 percentage points more likely to frequently worry about running out of money before getting paid again (51% vs. 36%); nearly twice as likely to have bills that are often past due (31% vs. 18%); and 10 percentage points more likely to buy things with credit, hoping to have the funds later (25% vs. 15%). 

Half of families awaiting support said they were unable to find any care for their kids — including with relatives or friends — and the vast majority (69%) worried their children were missing out on care that could better support their learning and development. That percentage plummeted to 21% for the families that eventually made it off the waitlist.

These concerns were particularly pronounced for parents of kids with diagnosed or suspected learning disabilities and delays, according to Bassok, who described this as an “intense and common theme in the responses.”

Families were “really worrying about what the wait for a child care center was doing for their kids at a critical moment in their development,” she said.

“My son is turning 2 years old and is not yet talking or interacting with other children,” wrote one parent. “Without access to affordable, quality care, he is missing vital opportunities for socialization and early learning that could support his development.”

Another argued her daughter’s delays were a direct result of low-quality care: “She is just being ‘watched’ and not taught much. She doesn’t say many words and I have to put her in speech therapy. … I didn’t have enough money to pay for the day care center that teaches babies.”

These concerns extended to physical safety as well: parents struggling to afford care were less likely to rely on regulated child care centers and more likely to turn to options they didn’t trust.

“The wait for assistance has forced us to rely on unlicensed home daycares out of desperation,” wrote another parent, “which comes with safety concerns and constant instability.”

On the flip side, parents of kids with disabilities who did have access to the subsidy reported an ability to access high-quality care. One wrote, “[Receiving a subsidy] has meant that my son, who has high functioning autism, can attend a safe school where he can get incredible care and since starting there he has been thriving.”

Bassok argued that the Brookings report demonstrates a growing need for more of the exact resources the federal government is trying to strip away. 

“Aside from this moment of what’s happening nationally around these cuts,” she said, “the real takeaway is around needed expansions in federal and state dollars to meet these demands for kids.”