As the DC Child Care Subsidy program has grown in recent years, helping more DC families pay for child care, so has the program’s budget. Now, program costs are outpacing funding while the city faces a $1 billion budget shortfall. In response, the DC government has decided to cap spending by implementing a child care subsidy waitlist policy for the first time since 2005.

The subsidy waitlist policy comes on the heels of innovations that have made a real difference for infants and toddlers in DC, including expanded subsidy eligibility and a streamlined application process.

In our recent study, 24 early care and education (ECE) leaders told us these investments have improved child care access, enabled more parents to work or attend school, and made DC a more affordable and attractive place to raise a family. The subsidy waitlist policy could threaten that progress by negatively affecting families’ access to child care, especially those with infants and toddlers.

In this article, we explain DC’s child care subsidy waitlist, its implications for infants and toddlers, and policy alternatives and other implementation considerations.

What is a child care subsidy waitlist?

Waitlists are one strategy states can use to address insufficient subsidy funding by limiting the total number of available subsidy slots without changing eligibility guidelines or freezing new applications. Essentially, one child must stop receiving subsidies before another can start, meaning families have to wait for weeks, months, and sometimes a year or more to access subsidies.

In 2024, 12 states had statewide or local subsidy waiting lists. Some waitlists, like DC’s, prioritize families with specific characteristics that indicate a greater need for support, such as children under child protective services, children who are unhoused, children with disabilities, and families participating in other public programs such as Head Start, Temporary Assistance for Needy Families, and the Supplemental Nutrition Assistance Program. Some priority families may not have to wait before being served.

How could the waitlist adversely affect DC’s infants and toddlers?

Infants and toddlers make up the greatest share of new subsidy enrollments and subsidy recipients in DC, meaning they’re more likely to spend time on the waitlist. They’re also the age group for whom child care is most expensive, meaning the subsidies play an outsize role in making child care affordable for these families. Taken together, families with infants and toddlers will bear the brunt of the waitlist policy.

Most ECE leaders we spoke with described infant and toddler care as affordable for families with a child care subsidy, but unaffordable for many who don’t qualify for a subsidy or otherwise don’t receive one. Many leaders shared the sentiment that public funding should be expanded to make care accessible for more families, particularly those with moderate incomes who are currently ineligible for subsidies but don’t have sufficient income to afford the full price of care.

“The fact is that infant toddler care is largely unaffordable. For many, many parents, it's prohibitively expensive if you don't have two to three grand per month to invest in it. And then you just don't have access to that care at all unless you have access to a subsidy.”—DC ECE leader

One leader also noted that a waitlist could cause a harmful lapse in services for families who currently have subsidies but face challenges while reporting status changes or completing the annual renewal processes.

“If I’m an employed parent and I need child care—and say I have a review and I fail to come for my review—so, my case is closed out. If I come back in to reapply, I have to go on a waiting list.... So, in the meantime, that means I could lose my job.”—DC ECE Leader

What other policy levers can states use to address insufficient subsidy funding?

Waitlists aren’t the only policy designed to stall or reduce the number of families receiving subsidies, however, and some states have implemented other policies that may have different outcomes for families with infants and toddlers.

• Temporarily freeze subsidy enrollment before it exceeds available funds. In 2024, localities in three states temporarily froze enrollment with the goal to reopen it later, either when additional funding is allocated or when enough families have exited the program. A freeze is more restrictive for infant and toddler ECE access than DC’s current waitlist model.
• Tighten eligibility guidelines based on family income or other priority criteria. Between 2023 and 2024, nine states either kept their income eligibility limits static or lowered the threshold to reduce the number of families who qualify to receive the funds. With tighter eligibility, all eligible families can access subsidies, but stricter requirements mean fewer families actually receive subsidies. Depending on the eligibility guidelines selected, this strategy could increase access for the infants and toddlers most in need of support compared with DC’s current waitlist model, but it would also eliminate access for other families.
• Allocate additional funding to cover the cost of subsidies for more families. This can come in the form of investments that enable states to set subsidy eligibility limits at or above 85 percent of the state median income, cap copays at 7 percent of family income or less for some families, or set provider reimbursement rates at or above the 75th percentile of the local market rate. Vermont, for example, has done all three through a combination of federal funds and significant state investment codified by the state legislature and funded in part through a payroll tax. This approach could ensure subsidy access for DC families with children from birth through school age.

Ultimately, fewer families—and especially families with infants and toddlers—will be able to enter the subsidy system if there are insufficient funds. Research from Virginia shows that a lack of affordable child care while on a subsidy waitlist prevented many parents from going to work and caused severe financial hardship, including food and housing insecurity. This also means employers could lose valuable workers, and child care businesses could see strained budgets as fewer families enroll their kids in care.

While the best and most effective policy to address the funding shortfall is still uncertain, policymakers should consider the implications of subsidy policies for infants and toddlers and the far-reaching consequences of cutting programs that serve children in these critical early years.