7 Childcare Trends Every Provider Needs to Know in 2026

If you attended our recent webinar, Child Care Trends to Watch in 2026 with early childhood expert and consultant Dr. Tamar Andrews, you already know the landscape is shifting fast. For those who joined us live, this post distills the most critical takeaways — plus actionable next steps to protect and grow your program in the year ahead.

1. Federal Funding Is Shifting — But It's Not Enough

Federal investment in child care is technically growing. The Child Care Development Block Grant increased by $85 million, Head Start received nearly $12.5 billion, and 23 states just secured new grants ranging from $500K to $15 million each. That sounds encouraging — until you measure it against actual need.

The hard truth: The funding increases are modest relative to the scale of the crisis. With pandemic relief dollars fully exhausted as of December 31, 2025, many programs are already feeling the gap. Those relief funds masked the underlying structural deficiencies in childcare financing. Now that they're gone, the cracks are showing.

"Nearly 4.5 million children in the U.S. currently lack access to childcare — due to cost, geographic deserts, or both." — Dr. Tamar Andrews

2. Enrollment-Based Billing Is Under Threat

One of the most alarming policy reversals happening right now: states are moving back to attendance-based billing for subsidy payments, rather than enrollment-based. Translation? If a child is sick, on vacation, or simply has a bad morning — you don't get paid for that slot.

For operators already working with thin margins (often 5–6% net), this could be devastating. It ignores the fundamental reality that a reserved slot has a cost whether or not the child shows up that day.

3. The Insurance Crisis Is Real — and Getting Worse

80% of childcare providers are reporting higher insurance premiums. Some centers are seeing increases of $10,000 or more per year. Worse, some carriers are exiting the child care market entirely — and when competition drops, prices spike.

Family childcare homes are being hit hardest: they face outright coverage denials and steep rate increases, even though they often serve the most price-sensitive families.

The good news: solutions are emerging. Risk pooling models — where groups of providers, especially in home-based networks, negotiate shared coverage — are gaining traction. The NAEYC is piloting shared coverage solutions, and the National Governors Association is developing state-level frameworks. If you're not yet a member of your state AEYC chapter, now is the time.

4. Universal Pre-K Is Reshaping the Market

UPK expansion is good for families and the economy — maternal employment went up 2.5%, parent earnings increased 22%, and more children accessed quality care. But for private providers, the picture is more complicated.

Three- and four-year-olds are increasingly migrating to free public programs. States with 22 or more are seeing lower enrollment among that age group than before the pandemic. Private, faith-based, nonprofit, and for-profit centers are left competing for a shrinking slice of the preschool-age market.

The pivot: infant and toddler programming. These slots aren't being absorbed by UPK — but they come with higher operational costs, lower capacity ratios, and families resistant to paying premium rates. Centers that figure out how to make infant/toddler programs work financially will have a significant competitive advantage.

5. Geographic Inequity Is Growing

Where a family lives increasingly determines whether they have access to affordable, quality care. New York City's Mayor is pushing for universal free childcare regardless of income. Meanwhile, communities just across the bridge may have nothing comparable.

This creates both a challenge and an opportunity. Childcare deserts — areas with insufficient supply — are real and documented. For entrepreneurs or expanding operators, mapping your region's deserts could reveal unmet demand that's going unfilled.

States like New York ($500M investment), New Jersey ($120M), and Maryland (a third-model approach prioritizing private providers) are leading the way in aggressive reinvestment. If you're in one of these states, make sure you know what funding is available and whether you're positioned to apply for it. Find your state resources here.

6. The Workforce Crisis Isn't Getting Better

Childcare's workforce numbers tell a difficult story. 40% turnover. Wages still 23% lower than comparable fields. A 3% projected job decline over the next decade. 92–94% of the workforce is female. And workforce shortages are now the number one barrier to expanding capacity — not facilities, not demand.

Several pieces of legislation are attempting to address this directly. The Child Care Workforce and Facilities Act (HR 581) would provide grants covering up to 50% of facility construction and renovation costs, plus workforce development funding. The Child Care Workforce Supply Tax Credit would give providers a 5–7% credit on wages paid — stabilizing compensation without raising tuition. These bills are bipartisan. A simple email to your congressional representative can make a difference. Learn more here.

A 5% wage increase could be the difference between keeping a great teacher and losing them. Advocate for HR 581 and the Supply Tax Credit Act.

7. Costs Are Reshaping Family Decisions — And Your Revenue Strategy

Infant and toddler care in family-based settings now averages $18,500/year — an 80% increase since before the pandemic. Childcare is the second largest expense for most American families after housing. And costs are directly influencing when (or whether) families have children at all.

This means your pricing, your communication, and your value proposition matter more than ever. Families aren't just shopping for care — they're making major life decisions. Providers who can clearly communicate quality, stability, and value will be better positioned.

How to Adapt: Your 2026 Action Plan

• Specialize in infant and toddler care — this is where private centers can differentiate and avoid direct UPK competition

• Expand your hours — early mornings, evenings, and weekend care addresses gaps families can't fill elsewhere

• Pursue Head Start and UPK mixed-delivery contracts — public dollars can flow to private settings

• Explore insurance risk pooling — connect with your network or state association to negotiate group rates

• Develop a niche pedagogy — STEM, Montessori, Reggio, faith-based, or culturally specific programs attract families who want something beyond generic care

• Monitor and apply for state grants — construction, renovation, and expansion funding is available in many states right now. Know what's going on in your state.

Running a Tighter Ship While the Landscape Shifts

Here's the thing: you can't advocate, adapt, and grow if you're drowning in administrative work. That's exactly why Playground was built. Dr. Andrews herself asked her sons, Daniel and Josh, to build the tools she needed when nothing on the market worked well enough. Word spread, and today Playground is used by hundreds of thousands of childcare professionals nationwide.

Playground is the only all-in-one childcare management platform that handles:

• Enrollment and CRM — manage inquiries, waitlists, and onboarding in one place

• Billing and tuition collection — automated invoicing, subsidy tracking, and payment processing

• Attendance — digital sign-in/sign-out, contactless options, and real-time reporting

• Payroll — built for childcare operations, not generic businesses

• Digital paperwork — forms, authorizations, and compliance documents, paperless

Ready to See How Playground Can Help Your Program?

Schedule a free discovery call with our team. We'll walk through your current operations, identify where you're losing time and money, and show you exactly how Playground can help.