Hoosiers protest child care voucher cuts in front of the Indiana Statehouse, in Indianapolis, on Friday, Oct. 10. Photo by Leslie Bonilla Muñiz, Indiana Capital Chronicle.

By Leslie Bonilla Muñiz
Indiana Capital Chronicle

INDIANAPOLIS — Consolidating sites. Cutting curriculum. Dropping pay.

Hoosier child care providers are scrabbling for ways to stay open as Indiana’s freeze on low-income vouchers cramps enrollment and double-digit reimbursement rate cuts eat away at already narrow margins.

Providers collectively stand to lose an estimated $3.8 million a week – almost $200 million a year – according to Early Learning Indiana, a prominent child education advocacy group and site operator.

Jonathan Prewitt, who’s operated in-home programs in New Albany since 2011, said “I’m not saying that we’re going to be in business much longer. I’m hoping that we could … because our kids need us.”

Some providers are mobilizing to swap survival strategies, protest the state’s changes or get trained on advocating with lawmakers.

Advocates say the cuts hurt more than just an industry.

No Exit

Low-income Hoosier families can nab vouchers through two child care assistance programs: the federal Child Care and Development Fund and the state-level On My Way Pre-K.

About 35,000 children typically participated pre-pandemic, according to the Indiana Family and Social Services Administration.

That swelled to nearly 68,000 children in the final months of 2024 – the waning days of former Gov. Eric Holcomb’s administration.

FSSA put the jump in demand down to broadened income eligibility, state capacity-building grants and federal funding when, in December, it implemented the first waitlist for child care vouchers since 2018.

When Gov. Mike Braun took office in January, he proposed allocating $362 million to child care vouchers – enough to close the waitlist.

Indiana has spent hundreds of millions of dollars on Child Care Development Fund vouchers in recent fiscal years, which run from July to the following June. Fiscal years 2026 and 2027 are estimates. Family and Social Services Administration.

Lawmakers scrapped that.

Instead, they set aside $147 million in “hold harmless” funding for the 2026 fiscal year, which began July 1. It’s enough to renew vouchers at the same income requirements for families already on the program.

New enrollees face narrower standards.

FSSA is focusing on funding current participants, and “is not issuing new vouchers for 2025,” a spokesperson told the Capital Chronicle.

Nearly 30,000 children were languishing on the waitlist in August, according to an agency subsidy dashboard. That’s the latest data available.

OMWPK vouchers were curtailed for the current school year: there’s a cap of 2,500 enrollees that can each receive a maximum of $6,800 in funding, narrower eligibility thresholds and other changes.

And last month, FSSA announced double-digit reimbursement rate cuts for CCDF vouchers: down 10% for infant and toddler care, 15% for preschoolers and a whopping 35% for school-age children.

Braun’s FSSA pinned the blame on the Holcomb administration, a news release said.

The rates went into effect Sunday, Oct. 5, with the first pay date being Thursday, Nov. 6.

Children with vouchers were at least 25% of clients at almost half the state’s 4,300 providers in a March analysis by Early Learning Indiana.

Maureen Weber, president and CEO of Early Learning Indiana, is most concerned about the 900 “highly dependent” providers with at least 75% of clients using vouchers.

Voucher losses are hitting Hoosier providers at an estimated $1.9 million weekly, while reimbursement rate cuts subtract another $1.8 million weekly, according to an Early Learning Indiana dashboard unveiled this month. It breaks down the impacts by county.

Cutting Back

Providers say they’re feeling the impacts – and making adjustments.

At Shepherd Community Center in Indianapolis’ Eastside, about 65% of children pay with vouchers. The organization had about 70 seats, but enrollment has fallen closer to 60. Some have just aged out, but others have lost their vouchers.

Children play at the Downtown Children’s Center in St. Louis, Missouri. Photo by Rebecca Rivas, Missouri Independent.

Shepherd’s losing roughly $1,400 weekly.

The organization is exploring group purchasing and teacher-sharing; working with a company to examine utility expenses for possible savings; and trying to raise funds.

Early Learning Indiana runs nine centers in Indianapolis, with about a third of students paying with vouchers. They’re losing $10,000 a week.

Early Learning Indiana has some philanthropic money it uses to support providers across the state, but it’s “a multiple hundreds of millions of dollars problem,” said Weber.

Learning Advocacy

Some providers are taking action.

Prewitt, of Pit Stop for Kids, is gathering fellow New Albany-area operators to attend FSSA’s next quarterly financial reporting meeting Wednesday, Oct. 29, with plans to rally after the child care discussion ends.

Child care worker Marci Then helps her daughter, Mila, 4, put away toys to get ready for circle time at the Little Learners Academy in Smithfield, R.I. Photo by Elaine S. Povich, Stateline.

He worries his parents will have to quit their jobs to take care of their children, or keep working and leave them home alone.

The Indiana Association for the Education of Young Children just wrapped up a two-day advocacy and leadership academy in Indianapolis, attended by about 70 early childhood educators, according to Hanan Osman, executive director.

The association doesn’t organize protests or endorse political candidates in line with its nonprofit status.

Instead, it’s compiling testimonials and preparing members to meet with their representatives about the influence of early child education on kindergarten readiness, ways to lower expenses while maintaining quality and the hunt for sustainable government funding.

A Statehouse day is also scheduled for Thursday, Feb. 5.