Indiana Freezes Child Care Vouchers Until End of 2026 Amid Funding Issues

INDIANAPOLIS, Indiana – Indiana officials announced Wednesday that the freeze on child care vouchers for low-income families will continue through the end of 2026, according to a fiscal update from the Family and Social Services Administration.

The state stopped issuing new Child Care and Development Fund (CCDF) vouchers in December, impacting nearly 31,000 children. These federally funded vouchers assist families with costs for day care, preschool, and after-school care.

Adam Alson, director of the Office of Early Childhood and Out-of-School Learning, explained, “The office simply does not have the funding available to prudently begin enrollment before that date.” In addition to freezing the voucher enrollment, the state also reduced payments to child care providers this month, which has pushed some to lay off staff or close their doors.

Sam Snideman, vice president of government relations for the United Way of Central Indiana, expressed concern that continuing the waitlist will force many parents out of the workforce. “That’s going to have some pretty devastating implications for household economic stability and for the state’s economic health,” he said.

Snideman warned that children missing out on quality child care may enter school unprepared. Alson, however, defended the cuts, stating that prioritizing the needs of families already enrolled in CCDF was essential.

“By lowering reimbursement rates, the state avoided forced mass disenrollment and kept current vouchers intact, ensuring continuity of care for thousands of children,” Alson stated.

The funding shortfall stems from decisions made during the administration of former Gov. Eric Holcomb. Indiana once utilized temporary federal aid during the pandemic, but lawmakers chose not to provide long-term state funding when that aid ended.

As a result, participation in the CCDF program has dropped roughly 14%, with about 53,000 children receiving vouchers as of September. Alson did not disclose how many vouchers could be supported at the current funding level.

In a statement, Early Learning Indiana expressed concern about the cuts, emphasizing the risk to vulnerable children’s early learning opportunities and the potential economic impact on families. The nonprofit currently receives state vouchers for around 350 children and is aiming to raise $750,000 to cover cost cuts in the upcoming school year.

“We are going to be extremely prudent and make sure that every voucher we enroll in the future can be funded for as long as that family needs it,” Alson concluded.