Officials say the new federal childcare rollbacks will have ‘limited impact’ on New Hampshire

The Granite State has been able to avoid most of the impact of new rollbacks to federal childcare assistance subsidy rules, according to state officials. 

On May 11, the federal Administration for Children and Families announced a large childcare reform package that, according to Assistant Secretary Alex Adams, will “lower costs, expand access and better serve families who rely on federally-funded child care programs.” He said the new set of rule changes and announcements is aimed at advancing President Donald Trump’s “pro-family agenda.” 

The administration set its sights on childcare assistance earlier this year, when it threatened to cut federal childcare funding to states amid claims of fraud in Minnesota childcare centers. Funding to New Hampshire’s Child Care and Development Fund grant — the pot of money that funds the majority of the state’s Child Care Scholarship Program — remained intact.

However, around the same time, the federal government also announced it would attempt to rescind “Biden-era policies” from March 2024 that improved how states paid childcare programs receiving assistance subsidies. 

This month’s announcement did just that. Included in the package was the repeal of a variety of Child Care and Development Fund requirements, including those governing how states administer and pay for programs. It also encourages states to lean into parental choice and faith-based care. 

The changes are substantial but will not significantly alter how New Hampshire runs its programs, according to Jake Leon, spokesperson for the N.H. Department of Health and Human Services, the agency that oversees childcare. 

“Overall, the newly released amended rule has limited impact on the NH Child Care Scholarship Program,” Leon said. “These new regulations roll back requirements and restore flexibility to states to pursue [Child Care and Development Fund] subsidy development that aligns with their unique state needs.” 

Programs will still have prospective and enrollment-based payments

In New Hampshire, the Child Care Scholarship Program is the primary assistance program available to families who need help affording childcare. Eligible families sign up, and the state pays childcare program tuition on a family’s behalf. Occasionally, families also contribute a small amount to tuition payments. 

As of April 2026, at least 5,211 children are receiving scholarship funds, according to the state Department of Health and Human Services. 

Two of the rescinded 2024 rules were aimed at improving payments to scholarship-taking childcare programs. The requirement for a prospective payment program, which allowed states to pay programs earlier than before, was repealed, and enrollment-based payment, in which programs were paid based on a child’s enrollment rather than daily attendance, was also made optional. 

The rules were originally changed to improve cash flow for childcare providers in an industry where businesses operate on thin margins. Changing payment rules allows programs to pay their staff closer to the time of care rather than two to three weeks later, creating a stronger incentive for programs to accept scholarship reimbursement. 

States had a deadline to fund and implement the changes, the majority of which New Hampshire funded in its most recent biennial budget, passed last July. Prospective payment, based on child enrollment rather than attendance, was included in the state’s biennial budget and began on Dec.1, 2025. 

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According to Leon, the state is not considering repealing the programs. 

“These payment practices align with industry standards where families pay in advance, but prospective payments are still optional in the system,” Leon said. “Providers are still able to bill after services have been provided, which provides maximum flexibility and keeps NH compliance with federal rules. DHHS is not considering changing current payment practices.” 

Family cost share percentages will not change

The federal government also repealed its mandate that families pay no more than 7% of their median income toward childcare copayments. Called cost share in New Hampshire, it is the amount a family pays as their contribution toward childcare costs in addition to what the state pays in scholarship. Depending on a family’s income eligibility, sometimes they also have to pay a small amount. 

Under the old mandate, New Hampshire families that made more than 138% of the federal poverty guidelines but less than 85% of the state median income did not have to pay more than 7% of their income toward their tuition cost share. States were required under the 2024 law to impose the cap, but the recent decision from the Administration for Children and Families makes it optional for states to do so. 

Now, the federal language requires only that co-payments “cannot be a barrier to families receiving child care assistance,” and the states again get to decide family copayment amounts. 

Leon said the department “does not have plans” to roll back the cap on family copayments. 

Other changes

The reform package also codifies the repeal of the requirement that states devote a certain amount of their Child Care and Development Fund dollars to certain “direct services.” Specifically, states were required to fund grants and contracts with third parties to help improve childcare for infants and toddlers, children with disabilities, and children in underserved geographic areas. 

According to Leon, New Hampshire received a federal waiver, allowing the state not to invest in these types of care, so the rollback will not affect the state or the scholarship program.  

Currently, federal funds are being used in various contracts between the state and third parties, some for professional development in the specified areas. One contract, to offer providers free professional development to care for children with disabilities, was withdrawn from the Executive Council earlier this month over diversity, equity, and inclusion language. 

Additionally, the Administration of Children and Families clarified that assistance funds can be used for faith-based childcare and license-exempt childcare from family, friends and neighbors in an effort to expand parental choice and “reduce unnecessary barriers for the trusted providers and caregivers many families already rely on.” 

New Hampshire already allows license-exempt providers and programs to receive scholarship funds, so long as they meet the necessary state and federal requirements. License-exempt and home-based care make up about 15% of the state’s childcare capacity and include faith-based providers, though there are few.