Recent analyses of child care affordability have generated headlines showing Vermont among the states with the highest child care costs relative to income. But those headlines don’t tell the whole story. These findings don’t account for the policies states use to reduce what families actually pay. Instead, they reflect the price of care in the private market. In Vermont, the Child Care Financial Assistance Program (CCFAP) plays a central role in lowering out-of-pocket costs for families. At the same time, recent policy changes have intentionally raised reimbursement rates to better reflect the true cost of providing high-quality care. Understanding both of these dynamics is key to interpreting national comparisons.
Some of these headlines stem from analyses such as the Diversity Data Kids report Who Can Afford Child Care?, which compares the price of child care to family income to estimate affordability for working parents across states. Data from that analysis were featured in Newsweek’s map of child care costs by state, highlighting how expensive child care is across the United States. Similar themes have also appeared in other recent coverage, including a New York Times analysis examining how the rising cost of child care compares to inflation in the article Why Does Child Care Seem Less Affordable Than Ever? While these analyses use different data sources and methods, they share a common limitation: They focus on market prices and do not account for the financial assistance policies that reduce what many families actually pay.
The research compares the price of child care to family income to estimate how affordable care is for working parents in each state. Nationally, the analysis finds that many families would need to spend well above the federal affordability benchmark of 7% of family income to pay for care.
These findings reinforce something families, providers, and policymakers already know: Child care is expensive in the United States. But like any data analysis, it tells only part of the story.
What the analysis doesn’t account for
These analyses estimate affordability by comparing child care prices to family income, assuming families pay the full market price for care. In reality, many families do not. Child care financial assistance programs (often called child care subsidies) are specifically designed to reduce what families pay for care. In Vermont, the Child Care Financial Assistance Program (CCFAP) significantly lowers out-of-pocket costs. Eligibility extends to families earning up to 575% of the federal poverty level ($189,750 for a family of four), the highest eligibility threshold in the country.
Looking at affordability without accounting for financial assistance is a bit like analyzing health care costs without accounting for health insurance. The sticker price alone does not reflect what many families ultimately pay. That missing context matters when interpreting state comparisons and thinking about child care affordability more broadly.
Vermont’s higher prices also reflect investments
The analysis also highlights that child care prices in Vermont are relatively high compared with income. That can understandably raise concerns.
But higher prices can also reflect an important policy choice: moving closer to the true cost of providing high-quality child care.
For many years, early childhood programs across the country have faced a structural challenge: The true cost of providing safe, high-quality care, including paying early childhood educators fair wages, is higher than what most families can reasonably afford. As a result, the system has historically relied on programs charging less than the true cost of care and educators earning lower wages. Low wages have created persistent challenges for recruiting and retaining staff, threatening the long-term sustainability of many programs, and preventing the creation of child care slots to meet the needs of families in Vermont.
States like Vermont have been working to close that gap through public investment, including policies designed to:
- Increase reimbursement rates for child care programs
- Strengthen the early childhood workforce
- Expand financial assistance so families pay less out-of-pocket
In other words, higher prices can reflect progress toward funding the true cost of quality care, rather than relying entirely on families to shoulder those costs.
Why context and local policy matter
National analyses are valuable tools for understanding broad trends. But they can’t fully capture the details of each state’s policy landscape.
That’s why state-level data and ongoing monitoring are essential, particularly as Vermont implements major child care reforms through Act 76.
Building Bright Futures is charged with monitoring Vermont’s early childhood system and providing data that helps policymakers and community partners understand how policies are working for families and providers, and where additional improvements are needed. BBF’s quarterly Early Ed Bulletins, annual Monitoring Reports, and Act 76 data portal provide Vermont-specific data and context that help interpret national research alongside local realities and lived experiences.
The bottom line
Child care affordability remains a real challenge across the country, and analyses like this one help keep the issue in the national spotlight. But understanding affordability requires looking beyond the sticker price.
Policies that reduce family costs and support high-quality programs are essential pieces of the picture, and in Vermont, those efforts are actively underway.
