In early January 2026, the Administration for Children and Families (ACF) at the Department of Health and Human Services published a Notice of Proposed Rulemaking (NPRM) aimed at amending the Child Care and Development Fund (CCDF) regulations, the primary federal subsidy program that helps families afford child care.
Why It Matters
CCDF serves as a key federal block grant supporting child care access for families across all 50 states, territories and Tribal organizations. Federal regulations shape how states design and operate their subsidy programs, affecting family affordability, provider stability and program administration. Any shift in these rules will impact state subsidy systems and affect millions of families and providers.
Key Proposed Changes
Removes the Mandatory 7% Family Co-Payment Cap
The 2024 rule imposed a federal requirement limiting family co-payments to no more than 7% of income. The NPRM would remove this cap, instead allowing states to set co-payment policies that reflect local needs and priorities, as long as those policies do not create barriers for families to access subsidy.
Eliminates the Grants/Contracts Requirement for Specific Services
The 2024 final rule required some CCDF funds to be used through grants or contracts to deliver direct services to groups like infants/toddlers and children with disabilities.
Under the new proposed rule, this requirement would be repealed, allowing states to use vouchers or certificates just as they did under prior rules.
Rolls Back Prospective Payment Requirement
The 2024 rule sought to stabilize provider revenue by requiring states to pay child care providers in advance (prospectively) rather than after services were delivered.
The NPRM would repeal this requirement, allowing states to decide whether to pay prospectively or on a reimbursement basis.
Restores Attendance-Based Billing Options
Under the 2024 final rule, states were required to make payments to providers based on a child’s enrollment rather than actual attendance.
The NPRM proposes to repeal this requirement, allowing states to choose among allowable options that satisfy the statutory requirement to “delink” payments from sporadic absences.
What’s Next?
This proposal is open for public comment as part of the federal rulemaking process. Public comments may be submitted through February 4, 2026. After the comment period closes, ACF/HHS will review feedback and may issue a final rule, potentially adopting these changes with revisions.
If finalized, the rule would take effect 60 days after publication of the final version.
How to Submit a Public Comment
All comments must be submitted online through the Federal Register’s website. Use this link to make your comment: Federal Register :: Restoring Flexibility in the Child Care and Development Fund (CCDF)
- After reviewing the proposal, click the “Submit a Public Comment” button to begin the submission process.
- When you have written or uploaded your comments, you will be prompted to provide some basic information about yourself. When finished, click “Submit Comment” to complete the process.
If you have any questions or need additional help, please contact FFN using this link: Contact Us – First Five Nebraska
