Building a Stronger Foundation for Indiana's Child Care System
Dear Early Childhood Providers,
During the recent Family and Social Services Administration (FSSA) Quarterly Financial Review (QFR), the Office of Early Childhood and Out-of-School Learning (OECOSL) shared key updates on Indiana's child care system and its financial outlook. You may watch OECOSL's presentation on FSSA's YouTube Channel and review the slides (33-62).
At the start of 2025, OECOSL faced three major problems inherited from the prior administration:
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Over-enrollment of families on Child Care and Development Fund (CCDF) vouchers in 2023-2024.
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Inflated reimbursement rates that exceeded the true cost of care.
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No sustainability plan after $1.27 billion in federal relief funding ended in late 2024.
Without intervention, thousands of families risked losing care and providers faced severe financial strain. The General Assembly responded with $147 million in new state funding—the largest child care investment in Indiana's history—and OECOSL acted quickly to restore balance:
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Recalibrated Rates: Updated provider reimbursement rates based on real cost data, replacing fiscally unsustainable "transition rates" and maintaining support for more than 53,000 children.
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Redirected Resources: Cut $30 million in contracts and reduced staffing costs by half this year, reallocating $75 million over two years directly to CCDF vouchers.
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Enhanced Support: Launched the Provider Help Desk with Indiana 211, handling 1,800 calls in its first month and saving $45 million while improving service.
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Increased Transparency: Released reimbursement rate methodology and outlined financial tradeoffs clearly to providers and policymakers.
OECOSL's work is guided by three principles: fiscal responsibility, transparency, and entrepreneurial governance. These principles ensure funding decisions are data-driven, accountable, and focused on supporting families and providers.
CCDF vouchers remain fully funded for currently enrolled families, with no new enrollments expected through 2026 unless additional state or federal funding becomes available. The On My Way Pre-K program continues to serve about 2,000 children statewide at the statutory maximum grant of $6,800 per child.
OECOSL will continue providing clear, data-based updates through future QFRs and direct communications with providers as this work progresses.
Thank you,
Adam Alson
Director, Office of Early Childhood and Out-of-School Learning
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