Child care has emerged as one of the most pressing affordability issues facing families with children nationwide, with 3 in 4 voters calling the cost of child care a crisis. In response, state and local leaders are trying to make early care and education more affordable while strengthening a sector strained by low wages, staffing shortages, and narrow operating margins (PDF). New Mexico is undertaking the country’s boldest approach—universal child care, a first-in-the-nation initiative.
In November 2025, New Mexico established universal child care by expanding its Child Care Assistance Program to provide no-cost care for families, regardless of income. The state codified the policy in March 2026 via the Child Care Assistance Program Act, appropriating $700 million through 2031 from the state’s Early Childhood Trust Fund, which is funded by taxes and royalties on oil and gas production.
As part of a larger evaluation, our team analyzed program and licensing data from the New Mexico Early Childhood Education and Care Department to examine the initiative’s early uptake. Our analysis indicates that
- about 9 out of every 10 families applying for child care assistance were served by a provider, even with a substantial increase in application volume in November 2025;
- more families are using child care assistance under universal child care; and
- child care providers’ participation in the program has increased.
This article offers new findings on whether and how child care supply can keep pace with demand as universal child care rolls out. Alongside other early evidence indicating promising effects on mothers’ labor force participation, these findings can inform other states considering similar investments.
Most eligible families who apply for assistance receive care
Early critics have argued that the state wouldn’t be able to meet significant demand as it introduced universal child care. However, we find that the state appears to have accommodated most new applicants and improved its capacity to determine eligibility, even during a period of rapid expansion.
Among those who applied before November 2025, 91 to 95 percent of families ultimately received care from a provider by June 2026. The share of applicants served remained around 90 percent or higher through the initial months of universal child care, when application volume was at its highest. The time between families’ application submission and eligibility determination was cut in half after the state’s child care assistance program rolled out, with a median wait time of five days by March 2026.
Since the start of the initiative, the share of applicants receiving care from a provider has decreased from 93 percent among November 2025 applicants (the first group to apply) to 81 percent among March 2026 applicants. Our data cannot show whether this pattern reflects differences between families seeking new arrangements and those using new public funding to pay existing providers. We also cannot identify whether the changing share of families served reflects declining child care needs, seasonal demand, providers reaching capacity over time, or shortages of specific types of care, such as weekend or overnight care. Because our data end in June 2026, some recent applicants may also have found providers after the analysis period.
More families received child care assistance following New Mexico’s universal child care launch
When universal child care launched in November 2025, child care assistance take-up was strong. The number of children enrolled at a provider rose by 6,012 children from October to November 2025 alone—reflecting the surge in applications received in November—with a net increase of about 13,000 children between July 2025 and June 2026. Most families served were already eligible (PDF) under prior eligibility rules (PDF).
Even as more children enrolled, the state’s supply of licensed seats exceeded the enrollment of children through the Child Care Assistance Program. However, an excess of seats does not mean that all families can find suitable openings. Providers may operate below their licensed limits because of staffing shortages, preferences about participating in the assistance program, or other operating constraints. Available openings may also not suit a child’s age or a family’s needs.
To expand supply and encourage participation in its child care assistance program, New Mexico has implemented related efforts, including higher reimbursement rates based on the actual costs of providing care and a low-interest, long-term revolving loan program to fund projects like new buildings or expanded classrooms. From November 2025 to June 2026, 105 licensed providers and 243 registered providers opened, with historical data indicating that 29 of the licensed providers and 74 of the registered providers were reopening after having closed in the two years prior.
Existing providers responded to rising demand, even as new supply took time to grow
Because building child care supply takes time, licensed capacity did not grow as quickly as subsidized enrollment. About 3,857 additional slots were available across child care providers in June 2026 relative to July 2025—roughly 1 additional slot for every 4 additional children enrolled. This comparison is helpful for understanding the rate of expansion and the need for additional supply, although some share of newly enrolled families were likely already using a care slot and paying out-of-pocket.
Despite slower total growth, changes in participation among existing providers helped the system respond to rising demand. Under universal child care, more providers served at least one family using assistance, and participating providers enrolled more children using assistance.
Between July 2025 and June 2026, the number of licensed group homes enrolling at least one child through the program grew 22 percent, while subsidized enrollment as a share of their licensed capacity increased 13 percent. These patterns show greater provider participation and use of existing capacity, although the data cannot establish why individual providers changed their enrollment.
What comes next?
Our analyses show that the early rollout and uptake of universal child care have largely been successful. Child care businesses are opening, reopening, or expanding their enrollment under this initiative, while families are applying in high numbers to gain access to free child care and early education. Further, the state has demonstrated success in serving the families who applied.
Still, several implementation issues remain before New Mexico can realize its promise of universal child care. Policy leaders and researchers can address these issues by focusing on the following four directions:
- Continue supporting families who have not found care. Since universal child care began, the state and its implementation partners have proactively contacted eligible families who haven’t enrolled with a provider to help them do so. Continuing this outreach can help families navigate available options while giving the state better information about where and for whom supply does not yet match demand. Distinguishing applicants who are new to licensed care from those who previously used care with private funding would also provide a clearer measure of gains in access and affordability. These efforts can inform many states facing unmet child care needs.
- Assess the state’s capacity for serving children through its Child Care Assistance Program. Policymakers need accurate measures of care availability by location, age group, care setting, schedule, and other characteristics—not just providers’ licensed limits. These measures would clarify where existing providers can absorb demand, where supply gaps remain, and what realistic expansion goals might be.
- Identify challenges facing current and prospective providers. Existing providers can enroll some of the additional families needing care, but broader access will require new providers. Studying and addressing the financial, staffing, and administrative conditions that shape whether providers participate in the program, stay in business, open, or expand can help the state target its investments.
- Document how New Mexico made universal child care a reality. Growing participation and enrollment depended on new processes, expanded infrastructure, and coordinated work across key actors. Our ongoing implementation study and other research projects aim to document real-time innovation, challenges, and lessons learned. Future data can show where the program is improving and where additional changes are needed.
New Mexico’s early experience demonstrates both the promise and the complexity of establishing universal child care. As the initiative passes its first anniversary, tracking which families obtain care, where usable capacity remains, and what providers need to expand can help New Mexico move closer to its promise of universal access and give other states a clear roadmap.
