Most Americans know that child care is expensive, although they probably don’t always understand why. Despite the rise in cost, it is still difficult for child care facility owners to make a profit. Providers have many expenses, but the 2 largest are staffing and facility/occupancy costs (rent, mortgage, utilities, insurance, maintenance). Liability insurance, in particular, has become increasingly costly and difficult to obtain.
There is growing discussion about how child care regulations may contribute to the rising cost of care. Child care licensing and regulations play a vital role in protecting the health and safety of children—ensuring every program meets clear, evidence-informed standards set by state policymakers. Just as importantly, these regulations lay the groundwork for providers to build and strengthen the quality of their programs, creating environments where children can thrive.
However, it is important to remember that every regulation, no matter how well intended, can have an impact on the bottom line of these businesses, many of which operate on razor-thin margins. States strive for a balance between protecting children and not creating more financial hardships for providers, but it is a delicate and complex process.
With tightening budgets and a shifting federal early childhood landscape, states are increasingly motivated to re-examine their licensing regulations and administrative processes. Their goal is to identify and eliminate requirements that are unnecessary, duplicative, time-consuming, or overly costly for providers—without compromising the safety and quality of care.
How can states approach child care licensing regulations and process changes?
A successful regulatory review process should be collaborative and inclusive. States should engage providers, families, child development experts, and licensing staff in structured conversations about the purpose and impact of child care licensing regulations. This ensures that reforms are grounded in practical experience and real-world data. For example, regulations related to group size, teacher qualifications, or facility requirements should be regularly reviewed through the lens of current research and workforce realities. When possible, states should consider differentiated approaches that recognize provider type and size—creating flexibility for home-based care or small centers without compromising core health and safety protections.
Additionally, as states take a closer look at child care administrative processes, they should do so with a deliberate, data-informed approach that weighs both the benefits to child safety and learning and the potential burden placed on providers. Rather than aiming for broad deregulation, states should focus on meaningful reform—removing outdated or duplicative requirements, streamlining compliance processes, and reducing the silos of provider data collection. This includes examining administrative paperwork and data system functionality and workflows to identify inefficiencies that drive up provider costs without improving safety or quality.
How can modernizing state data systems reduce burden on child care providers?
Modernizing state data systems is a critical component of regulatory reform efforts. Outdated or fragmented systems often make it difficult for providers to comply with licensing requirements, submit documentation, or access the information they need to operate effectively. By investing in modern, user-centered platforms, states can reduce administrative burden, improve communication, and streamline oversight.
TCC’s Ascend and eXpedite technology platforms are purpose-built to support this transformation. Ascend provides a comprehensive, modular data system designed specifically for early childhood agencies, enabling efficient licensing, quality improvement, subsidy management, and more—all in one integrated environment. eXpedite complements this by offering an intuitive, mobile-friendly tools for states to conduct efficient licensing inspections and quickly make the results publicly available to families searching for care. Together, these solutions are designed with state leaders in mind—streamlining processes, reducing burden on providers and families, and delivering actionable data to guide smarter policy decisions and targeted investments.
Resources
- https://www.americanprogress.org/article/a-path-forward-on-child-care-regulation-differentiating-between-harmful-deregulation-and-helpful-reform/
- https://www.pakeys.org/certification-rewrite-project/
- https://dese.mo.gov/childhood/child-care-licensing-rule-revision-executive-order-25-15#:~:text=In%20Governor%20Kehoe’s%20State%20of,licensed%20child%20care%20within%20Missouri
- https://www.ffyf.org/resources/2025/05/reforming-regulations-and-decentering-deregulation/#:~:text=Additionally%2C%20in%20March