Modernizing Child Care: What You Need to Know About the New Proposal

Families, providers, and employers across Ohio and the nation know the child care system is stretched thin. Costs are high, access is limited, and many providers struggle to stay open. A new proposal in Congress—the Child Care Modernization Act of 2025—aims to update how our federal child care system works so it better meets the needs of today’s families, workforce, and economy.

The First Five Years Fund (FFYF) has released a new resource— Side-by-Side Analysis: Comparison of the 2025 Child Care Modernization Act to Current Law,  to break down what this proposal would mean. Here are some of the biggest changes included:

• Expanding supply of child care: Creates new grants to help open, renovate, or expand child care programs, especially in rural and underserved communities.

• Paying providers fairly: Requires states to use cost models—rather than outdated market surveys, to set payment rates, ensuring providers can cover the real costs of quality care.

• Strengthening equity: Puts greater focus on supporting children in foster care, experiencing homelessness, living in poverty, or in rural areas.

• Supporting providers as small businesses: Helps providers access technical assistance and business tools so they can thrive long-term, not just survive month-to-month.

• Recognizing all types of care: Formally embraces a “mixed delivery system” of care that includes child care centers, family child care homes, Head Start, faith-based programs, and schools.

The legislation also calls for better accountability, stronger data on family child care costs, and more flexibility for states to address local needs. The Act recognizes that child care is both a public good and an essential part of our economic infrastructure.

While there’s still a lot to work through—including how much funding will be available—this proposal marks an important step toward building a child care system that works for families, providers, and employers alike.

The urgency is clear. A new poll conducted by UpONE Insights, released by Groundwork Ohio and The Ohio Head Start Association, Inc., and in partnership with First Five Years, found that nearly 80% of Ohio voters—and voters across the nation—believe the ability of working parents to find and afford quality child care is in a “state of crisis” or a “major problem.” This overwhelming consensus underscores what families, providers, and employers have long known: without federal action, our child care crisis will continue to threaten family stability, workforce participation, and economic growth.