The State of Childcare in 2026: What We Are Seeing, What We Are Doing, and What Comes Next

A perspective from Children of America, a family-owned national preschool and childcare provider operating across 18 states

We have been in this industry for more than 25 years. We have watched it grow, weather crises, stabilize, and face new pressure again. From where we sit, operating 65+ locations across 18 states and serving hundreds of thousands of children and families, 2026 feels like a genuinely defining year for childcare in America.

This is not a forecast written from the outside looking in. It is what we are navigating in real time, every day, across every market we serve. We are sharing it because we believe the childcare sector grows stronger when operators talk honestly about what they are experiencing, not just what they are selling.

Here is what we see shaping the industry this year, and how we are thinking about it.

The Demand for Quality Has Never Been Higher, and Families Know the Difference

The demand for high-quality daycare and early education programs shows no signs of slowing down in 2026. Families continue to seek childcare options where they can trust that their children are safe, secure, and benefiting from enriching curricula that nurture development during the preschool years.

What has changed is how informed families are when they walk through our doors. Parents today arrive having researched curriculum frameworks, teacher-to-child ratios, accreditation standards, and developmental outcomes. They are not just looking for a place that feels warm. They are looking for a program they can verify.

For providers who have invested in research-based curricula, qualified educators, and whole-child programming, this is an opportunity. Families are more willing than ever to differentiate between programs based on quality, not just proximity or price.

At Children of America, we have always built our programs around the belief that educational childcare and quality care are not separate things. Our Mind and Body Matters curriculum integrates academic development, social-emotional learning, physical wellness, and nutrition into the daily experience of every child, from infants through school age. That philosophy was always right. In 2026, families are actively seeking it out.

The Funding Environment Is Unstable, and Operators Cannot Afford to Be Passive

This is the part of the industry conversation that is hardest to have, but most necessary.

With pandemic relief dollars fully exhausted as of December 31, 2025, many programs are already feeling the gap. Those relief funds masked the underlying structural deficiencies in childcare financing. The Child Care Stabilization grants that sustained thousands of programs through the pandemic years are gone. States that invested those dollars in workforce compensation, facility improvements, and subsidy rate increases are now facing the question of whether they can maintain those commitments without federal support behind them.

If 2025 was the year of confusion and concern about the future of childcare, 2026 may be the year the field’s troubles come to a head. Anticipated federal cuts are creating what some researchers are calling a perfect storm in an already fragile system.

We have already taken action on this front. Our CEO, Ted Hockenberry, has reached out directly to state representatives to raise concerns about federal subsidy payment delays and the harm they cause to working families and compliant providers alike. We believe responsible operators have an obligation to engage in these policy conversations, not just adapt to their outcomes.

For other operators: the providers who will be best positioned in this environment are the ones who are diversifying revenue, deepening relationships with state licensing and subsidy agencies, and making the case for why high-quality private providers deserve a seat at the policy table.

The Educator Workforce Crisis Is Real, and Compensation Is the Center of It

This is the most operationally urgent challenge in our industry, and it has been building for years.

The national median hourly wage for early childhood educators is $13.07, and only a small proportion receive benefits. As a result, 43 percent of early educator families depend on at least one public support program such as Medicaid or food stamps. Turnover rates in childcare are among the highest in education, with over 160,000 workforce openings predicted annually. While the workforce initially saw gains in the post-pandemic years, there has been a gradual decline in the number of childcare educators since 2024.

We do not share these numbers to assign blame. We share them because they describe conditions that every honest operator is managing, and that no individual provider can solve alone. What we can control is how we respond within our own organization.

At Children of America, we have focused on building a workplace where educators want to build careers, not just fill shifts. That means competitive compensation, real advancement pathways from Assistant Teacher to Lead Teacher to Director, internal recognition programs, and a culture that treats our educators as the professionals they are.

Retention starts before the first day. The providers winning in this environment are the ones who treat hiring and onboarding as part of the educational mission, not separate from it.

Families Want Transparency, and Providers Who Offer It Will Win Enrollment

In 2026, parents are looking for more than basic qualifications when selecting a childcare option. Beyond safety protocols, they seek genuine transparency into a preschool’s curriculum, learning approach, outcomes, and educator credentials.

This aligns directly with how we believe childcare should operate. Families deserve to know exactly what their child will experience each day, what the educational framework is built on, how teachers are trained, and what outcomes the program is designed to support.

We have also taken a clear position on cost transparency. We know that for many families, childcare pricing feels opaque and stressful. That is why Children of America offers a price match against any large chain childcare provider within 30% of our tuition rates. Families should not have to choose between a program they believe in and one they can afford. Making that commitment publicly is part of how we demonstrate transparency, not just talk about it.

Universal Pre-K Is Reshaping the Three and Four Year Old Market

This one requires honest acknowledgment from private providers.

Universal Pre-K expansion is good for families and the economy. Maternal employment has increased and parent earnings have risen in states where it has been implemented. But for private providers, the picture is more complicated. Three and four year olds are increasingly migrating to free public programs, and states with significant UPK expansion are seeing lower enrollment among that age group than before the pandemic.

At Children of America, we have thought carefully about what this means for how we position our programs. Our response has been to reinforce what private providers do that public programs structurally cannot: individualized attention at low ratios, full-day programming that matches working parents’ actual schedules, infant and toddler care that UPK does not address, extended hours, summer continuity, and the kind of family partnership that builds over years, not semesters.

The providers who will be most affected by UPK expansion are those whose differentiation story begins and ends with the three-to-five age group. The ones who will grow are those who serve the full arc of a child’s early years, from infancy through school age, with a program families feel genuinely connected to.

The Market Is Growing, But Not Equally Everywhere

The global childcare market is projected to expand from $274.71 billion in 2026 to $354.81 billion by 2031. Infant care for children under 12 months is set to expand at the fastest rate of any age segment over that period.

Growth at the national level does not mean growth at every zip code. Childcare deserts, defined as areas where demand significantly exceeds supply, remain a real and documented challenge across many of the markets we serve.

For Children of America, this shapes how we think about where we operate, how we support families navigating access issues, and where unmet need is greatest. As a family-owned company, we make location decisions based on community needs, not just market modeling.

What We Believe About 2026

We are a corporate company, but we are family-owned and operated. That distinction matters to how we make decisions, how we treat our educators, and how we show up for the families we serve. We are not managing this business to hit quarterly numbers at the expense of quality. We are building something we intend to still be proud of in another 25 years.

The childcare industry in 2026 is navigating real pressure from multiple directions at once: funding uncertainty, workforce strain, policy volatility, and a parent population that is more demanding and better informed than ever. None of that is cause for retreat. It is cause for exactly the kind of clarity, investment, and honest conversation that makes this industry stronger.

We will keep having that conversation — publicly, with policymakers, and with the families and educators who trust us every day.

Sources

1. Ducklings Franchise. “9 Childcare Industry Trends You Need to Know in 2026.” December 2025. https://ducklingsfranchise.com/blog/childcare-industry-trends/
2. Playground. “7 Childcare Trends Every Provider Needs to Know in 2026.” February 2026. https://www.tryplayground.com/blog/7-childcare-trends-every-provider-needs-to-know-in-2026
3. EdSurge. “Early Childhood Experts Expect to Hit ‘Tipping Point’ in 2026.” January 2026. https://www.edsurge.com/news/2026-01-13-early-childhood-experts-expect-to-hit-tipping-point-in-2026
4. Center for the Study of Child Care Employment, UC Berkeley. “Five Years After COVID-19 Began, A Struggling Child Care Workforce Faces New Threats.” March 2025. https://cscce.berkeley.edu/publications/press-release/five-years-after-covid-19-a-struggling-child-care-workforce-faces-new-threats/
5. McCormick Institute. “Role of Employer Benefits and Turnover in Center-Based Child Care.” 2025. https://www.mccormickinstitute.nl.edu/examining-the-role-of-employer-benefits-and-turnover-in-center-based-child-care
6. NAEYC. “ECE Workforce Surveys.” 2025. https://www.naeyc.org/ece-workforce-surveys
7. Mordor Intelligence. “Child Care Market Size, Outlook and Global Report 2031.” January 2026. https://www.mordorintelligence.com/industry-reports/child-care-market