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The standard narrative around the American child care system is that slots in licensed programs are prohibitively expensive and incredibly hard to find. In the past year or so, however, there is evidence of a decoupling between cost and availability. Child care remains utterly unaffordable and out of reach for many families, but increasingly — while years-long waitlists certainly still exist for some programs — many child care providers are struggling with underenrollment. Ironically, the fact that so many slots are now going unfilled poses another existential threat to the system.
The evidence for underenrollment is myriad, with data points coming in from a range of sources. For instance, KinderCare, the nation’s largest private child care provider, stated on a recent earnings call that enrollment was down around 2% year-over-year. The Bank of America Institute, an economic think tank that provides insights from the bank’s data, reported in October 2025 that, among its customers, the share of households with more than one source of income making child care payments had dropped to slightly under 35.5%. That figure is down nearly 2% since 2021, with a more prominent decrease among low-income households. These findings suggest that fewer families are utilizing licensed child care programs, which may result in open slots.
While these percentages aren’t massive, they are meaningful when applied across the board to the 13 million American families with young children. These data also track with a trend of mothers of young children dropping out of the workforce as they wrestle with high costs of living and declines in flexible work-from-home options.
Child care programs are reporting the phenomenon as well. Over half of child care program administrators polled in early 2025 by the National Association for the Education of Young Children (NAEYC) said they have fewer children enrolled than they would like.
Importantly, the sector’s declining enrollment doesn’t appear to be driven by some sudden drop of interest in licensed care among families, nor by declining birth rates as some nations like Germany are experiencing (there isn’t evidence that this is a significant factor in the U.S. yet.
Instead, households are grappling with a lack of ability to afford their preferred care arrangement. Among underenrolled programs in the NAEYC survey, the top reason (given by 41% of respondents) was parents’ inability to afford a slot. A recent survey of New York City parents from Columbia’s Center on Poverty and Social Policy found that 16% of respondents had cut back on child care hours or stopped using child care altogether due to cost; the number rose to 34% among single moms. (Other parents reported switching to what they considered “inadequate” care as a result of costs.)
Rising costs aren’t the only reason for underenrollment: A fierce scarcity of early educators is leaving many classrooms dark. In the NAEYC survey, the second and third most cited reasons for underenrollment related to not having — or being able to retain — enough staff. A recent analysis by the Wisconsin Early Childhood Association (WECA) illustrates how this plays out in practice. The analysis found that in Wisconsin, most center-based programs are operating at around 75% of their licensed capacity, leaving over 33,000 seats unfilled — and filling those seats would require an estimated 4,000 educators. Low compensation is a primary driver behind these staffing shortages. The WECA analysis also revealed that one-quarter of the state’s early childhood workforce left the field permanently in 2024. That’s a crippling level of annual turnover, to say nothing of the negative impacts on children who do best with stable caregivers. And when programs have to pay their monthly bills with fewer paying families, they may be forced to raise rates, ending up in a vicious cycle that can lead to closure.
The link between poor pay for early educators, staff shortages and underenrollment is not unique to Wisconsin. In 2024, a group of researchers led by the University of Virginia’s Daphna Bassok, released the latest in a series of workforce studies on Louisiana, a state with a particularly strong early childhood data system. Bassok’s team looked at programs accepting public subsidy dollars that did or did not utilize pandemic-era grants to boost wages. Among programs with lead teacher pay of $8.50 an hour, 40% had at least one-quarter of their staffing positions vacant, over half had to close classrooms and 70% had to turn families away. Programs with better, but still low, pay of $15 an hour (about $31,000 a year) had reduced rates of vacancies, but 47% still closed classrooms and 59% still had to turn families away.
Underenrollment, then, is a multifaceted problem that calls for multifaceted response.
For one, the trend adds more urgency to lower parent fees via direct public funding. The more states can follow the lead of exemplars like Vermont, New Mexico and New York in expanding who is eligible for free or low-cost care, the better. Underenrollment is also a symptom of how much families are struggling right now overall, suggesting the need to put more money in their pockets via mechanisms like expanded and refundable child tax credits.
Child Care Slots in Wisconsin Sit Vacant as Programs Struggle to Hire Teachers
On the program side, getting money into providers’ hands so they can stabilize and grow their staffing should be a priority. Here, states would do well to look at precedents like Massachusetts’ Commonwealth Cares for Children (C3) grants, which provide monthly checks to over 90% of the state’s licensed programs, and Washington’s Pay Equity Fund which raises early educator pay through wage supplements by an average of $10,000 a year while moving them toward parity with elementary school teachers. While there is certainly reason to continue building out new supply in geographic areas that need it, a major priority in the present moment should be maximizing the system’s existing capacity.
Policy tends to move along lines of “path dependence” — the concept that we do what we’ve done because that’s what we’ve been doing — and it can be difficult to unlearn old narratives or change course even when there is a promising alternative.
There are now two simultaneous truths about American child care: Families struggle to find child care, often facing long waitlists, while many child care centers sit partially empty. The slots aren’t vacant because families don’t need care. They’re vacant because families can’t afford care — and because providers lack the staff required to operate at full capacity. Policymakers need to adjust their strategies and solve for both problems at once.
The good news is that there is a solution that addresses each challenge in turn: making child care a right backed up by strong, permanent public funding. While the child care story has evolved, the answer has never been clearer.
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