Rising Childcare Costs: A Challenge for Families and Providers

Jennifer Williams plays with her sons at home. She decided to leave her job to care for her sons. This decision was difficult but necessary for her family. Initially, Williams expected to be a full-time working mom. However, the birth of her second son, Skyler, changed those plans. Skyler was born before her first son, SJ, was ready for public pre-K. Sending both to daycare was not affordable, leading Williams to quit her counseling job in Oklahoma City.

Now, Williams works part-time at a childcare program. She spends the rest of her weekdays taking care of Skyler, 2, and SJ, 4. Williams expressed the difficulty of leaving her job, acknowledging the financial forces that made the decision for her family. “I can’t imagine it differently,” she mentioned, reflecting on the financial constraints she faced.

Childcare costs are climbing across the nation. Child Care Aware of America, a nonprofit advocacy group, reports a 20% rise in average childcare costs from 2022 to 2025, reaching $13,184 annually. In Oklahoma, childcare costs increased by 9% for a 4-year-old and 20% for infants between 2022 and 2025. Washington, one of the least affordable states, saw a 41% rise in costs for both age groups.

Factors Driving Childcare Costs Up

Anne Hedgepeth, former senior VP of policy at Child Care Aware of America, spoke about multiple factors behind cost increases. Delays in state-conducted market-rate surveys played a part. During COVID-19, many states withheld market-rate surveys. This meant that state subsidies didn’t reflect the inflation-driven price hikes experienced in recent years.

Both families and childcare programs face rising expenses. Providers need to purchase food and supplies while dealing with increasing rent or mortgage costs.

State Policies Affecting Oklahoma

Oklahoma’s childcare subsidies are based on a 2017 market-rate survey. Katie Quebedeaux, of the Licensed Child Care Association of Oklahoma, highlighted the mismatch between current costs and subsidies. “You can’t reimburse us at outdated rates,” she said.

In October, Oklahoma will change income eligibility requirements for subsidies, reducing the number of qualifying families. Additionally, a new rating system affects provider reimbursement, prioritizing nationally accredited providers.

Despite a former $5-per-day add-on to subsidy rates, federal funding shortages led to its end. This decision impacted many providers who planned to include that funding in their budgets. Rachel Proper from Child Care Inc. faced an 18% bottom-line drop, which forced her to reduce staff benefits and other program aspects.

State Experiments and Solutions

The federal government offers limited solutions. The current administration rolled back policies that capped costs for low-income families. States like Michigan and Kentucky use a “tri-share” model, where the state, employer, and family split childcare costs. While beneficial, this model is tied to employment and doesn’t universally address childcare access.

In Iowa, a Statewide Child Care Solutions Fund matches private funds with state dollars, aiding childcare projects and workforce expansion. The program aims to open 11,000 new childcare slots and allow 5,000 women to join the workforce.

Oklahoma’s new pilot program targets daycare staffing and costs. It extends subsidies to childcare facility employees. New Mexico is pioneering universal no-cost childcare.

Despite state efforts, many parents face high childcare expenses. Child Care Aware of America notes that a married couple typically spends about 10% of their income on average childcare costs, while single parents spend 33%. Hedgepeth appreciates state initiatives but feels they fall short of easing parents’ financial burdens.