Child Care Modernization Act of 2026

Key Points

• The bill reauthorizes and updates the Child Care and Development Block Grant, the main federal program helping low-income families afford child care. It promotes a "mixed delivery system" that supports many types of providers, including centers, family homes, faith-based programs, and Head Start agencies, giving parents more choices.
• States must shift from market-rate surveys to a cost estimation model that covers the real costs of running child care, including staff salaries, building expenses, and operating costs. This model must be reviewed every two years and adjusted for cost-of-living increases.
• Eligible activities for parents are expanded well beyond traditional employment. Parents in job training, education, job search, mental health or substance use treatment, and those taking family or medical leave now qualify for child care assistance.
• A new Part II grant program provides funding for child care supply expansion and facilities improvements, including startup subgrants for new providers and facilities subgrants for remodeling, renovation, repair, and new construction of child care buildings.
• Families are eligible if their income is below 85% of the state median and their assets are under $1 million. States can apply for waivers to raise the income ceiling even higher, as long as they continue prioritizing and serving lower-income children first.
• States are required to track how much families spend on child care as a percentage of income and must conduct feasibility studies on lowering those costs and expanding access so that all eligible children can receive care.