NH Child Care Providers Brace for Potential Funding Freeze

Amid turmoil over a large federal funding source for child care, local providers are considering their options should payments to the Granite State be frozen.

As of Tuesday afternoon, New Hampshire centers have continued to get paid, a spokesperson for the N.H. Department of Health and Human Services told The Sentinel.

Federal child care grants help low-income families cover a portion of day care tuition. Losing that money would be more detrimental for centers that serve many families who rely on these vouchers, local day care providers said.

The financial effects would depend on the number of students getting grants. At the Keene Day Care Center, for example, more than half of students use vouchers. But at Walpole Village School, only two students rely on vouchers.

The Trump administration last week announced it was freezing child care subsidy payments to all states until programs provide additional documentation to safeguard against fraud. On Tuesday, the administration specifically halted money to five states governed by Democrats — California, Colorado, Illinois, Minnesota and New York — including $2 billion for child care subsidies, according to reporting by the Associated Press. Whether more states will stop receiving money is unclear.

Federal money is critical for the Keene Family YMCA’s day care program, according to Chief Financial Officer Christy Filby, who said roughly a third of the center’s 215 students receive vouchers.

“We’re in a wait-and-see position,” Filby said Monday. “I’m hopeful the situation will get resolved before the money stops flowing.”

Staff Kids in the 2-year-old room play on Tuesday at the Keene Day Care Center. (Ethan Weston/Sentinel)

Filby said the funding uncertainty makes it difficult to plan. A freeze on vouchers could force the organization to make up for the shortfall in other parts of the operation, with donations or by reshuffling staff, according to Filby.

State officials have said there have been no changes to child care funding so far, DHHS spokesperson Jake Leon said in an email Tuesday.

“[The department] is monitoring this situation closely and will communicate any changes to federal requirements to our childcare providers as quickly as possible.”

At the Keene Day Care Center, a nonprofit where more than half of its 70 students get federal child care subsidies, a funding freeze would cause cash flow problems, Executive Director Suelaine Poling said.

The center bills more than $10,000 a week in tuition, and the federal funds make up more than half of its budget, she said.

“It would be a big impact,” Poling said of the potential freeze. “[The money] funds every aspect of our program.”

The freeze could be devastating for parents, Poling said.

“Without [those funds], a large portion of families would not be able to afford child care for their children and would not be able to work,” she said.

At Walpole Village School, in contrast, vouchers aren’t a huge source of revenue. Executive Director Jody Metcalf said just two of the day care’s 25 students get child care subsidies.

“We’re fortunate in that respect,” she said.

At the nonprofit Rise for Baby and Family in Keene, a freeze could affect operations substantially, according to Executive Director Alicia Deaver. Seven of the center’s 24 students get federal tuition assistance, she said.

“Missing a few weeks of pay for one child would drastically impact our financials,” she said.

That tuition covers operating expenses such as staffing, food and supplies, she added.

Kids in the 2-year-old room play on Tuesday at the Keene Day Care Center. (Ethan Weston/Sentinel Staff)

If funds are paused, Rise would work with the parents to try to figure something out, Deaver said. That would likely include looking for more fundraising or donations to sustain family members.

“We don’t want to exclude, but we can’t run a free child care center,” she said.

The potential freeze isn’t what worries Deaver the most, though, she said. On Monday, the U.S. Department of Health and Human Services announced it would roll back a Biden-era policy and return to a subsidy system that pays child care providers based on each child’s daily attendance, rather than overall enrollment. It would also no longer give providers that money in advance.

That would cost Rise for Baby and Family some revenue and add a level of unpredictability for budgeting, Deaver said.

“For child care centers, it’s so much extra time and paperwork,” she said. “It would be life-changing in terms of our budgeting.”