Federal Early Education Update: March 2026

The first three months of 2026 have been busy ones for federal early care and education policy. Below is a roundup of events over the past three months that have a direct impact on early education.

PDG B-5 Awards

Despite the lack of an official announcement from the Administration for Children and Families (ACF), we learned in early January that a total of 23 states were awarded grants through the Preschool Development Grant Birth through Five (PDG B-5) program. These grants range from about $1.3 million to almost $15 million per state and are designed to help states maximize family choice, create seamless early learning experiences, and develop a unified state ECE system. Unlike past awards, these most recent grants are only for one year, so winning states are busy planning, obligating, and allocating funds on an accelerated timeline. It’s worth noting that the PDG B-5 program was recently level-funded at $315 million for Fiscal Year 2026 (FY 2026) despite being slated for elimination in President Trump’s budget request.

CCDF Proposed Rule

January also saw the publication of a notice of proposed rulemaking (NPRM) for the Child Care and Development Fund (CCDF). The proposed rule seeks to rescind many of the requirements included in a 2024 rule issued during the Biden administration, such as limiting family copayments to seven percent of family income, providing some services through grants or contracts, paying providers based on enrollment rather than attendance, and paying providers prospectively. As I wrote at the time, the Biden-era rule has been partly responsible for many of the recent positive changes in child care policy in states across the country that seek to address issues of affordability and accessibility. Our team at New America submitted comments on the proposed rule in February, pointing out that the proposed rule fails to address any documented issues with the existing standards and would weaken CCDF if implemented. We’re now waiting to see the specifics of the final CCDF rule that is ultimately issued.

Appropriations

On February 3, President Trump signed into law a massive funding package that includes increases of $85 million for both Head Start and the Child Care and Development Block Grant (CCDBG) program, along with level funding for Preschool Development Grants Birth through Five (PDG B-5) and the Child Care Access Means Parents in School (CCAMPIS) programs. This was a significant win for ECE advocates since the administration’s budget request eliminated both the PDG B-5 and CCAMPIS programs. The FY 2027 appropriations process is already beginning and we’re expecting the president’s budget request any day now.

Hearings and Legislation on Alleged Child Care Fraud

Due to unsubstantiated allegations of child care fraud in Minnesota publicized by a right-wing YouTuber, there has been a flurry of activity on the Hill focused on combating fraud in social services. In early January, the Department of Health and Human Services (HHS) announced that it was responding to the alleged fraud by freezing $10 billion in federal funds in the five Democratic-led states of California, Colorado, Illinois, Minnesota, and New York. After news of the initial freeze at the beginning of the year, HHS announced in early January that all states would be required to provide “a strong justification for the use of funds” in order to receive child care payments. The funding freeze was quickly blocked by courts, however, and, in early February, a federal judge extended an order blocking the Trump administration from withholding the funds.

While child care dollars continue to flow to states, there have been several committee hearings on the Hill focused on the alleged fraud. On February 12, the Senate Health, Education, Labor, and Pensions (HELP) Committee convened a hearing focused on preventing fraud in child care assistance programs. Senators from both parties expressed disapproval of potential fraud while several Democratic senators emphasized the harm that results from broad freezes of federal child care funding. Additionally, it was heartening to hear several senators express their support for federal child care programs. A related hearing was held on March 4 by the House Committee on Oversight and Government Reform.

The activity related to alleged fraud continued last week with Senator Bill Cassidy (R-LA) sending letters to the Democratic governors of Oregon, New York, and Michigan. The letters allege improper payment rates for child care assistance programs of as high as 35 percent. These alleged improper payment rates have not yet been made public, but it’s worth noting that the most recent data from FY 2023 reveals a much lower national error rate of just 3.55 percent. It’s important to note that these improper payments are typically not due to deliberate fraud, but rather to errors regarding income and work verification.

On March 5, the House Education & Workforce Committee passed eight bills aimed at cracking down on alleged fraud and strengthening oversight of federal child care assistance programs. Generally, these bills would create additional requirements for states and give the HHS Secretary added authority to withhold child care funds. While six of the bills passed along party lines, two bills received unanimous approval from both parties. Those two bills are the Stop Child Care Fraud Act of 2026 and the Closing the Provider Fraud Gap Act of 2026. The first bill that passed unanimously would add new requirements to state CCDF plans around the process for investigating and recovering fraudulent payments. The second bill would direct the U.S. Government Accountability Office (GAO) to study the effectiveness of fraud prevention measures across several federal programs, including Head Start and the Child Care and Development Block Grant (CCDBG). All eight bills now move to the floor for a vote by the full House of Representatives, but have yet to be introduced in the Senate.

Looking Ahead

The next few months promise to be busy ones for federal ECE policy. The FY 2027 appropriations season will kick into high gear once President Trump’s budget request is released sometime in the next few weeks. We’re also expecting a NPRM around Head Start to be released soon. In November 2023, the federal Office of Head Start proposed new requirements to support and stabilize the Head Start workforce, including adjusted wages and benefits, breaks for staff, and enhanced supports for staff health and wellness. The upcoming NPRM is expected to attempt to rescind many of those requirements.