In 2022, the Massachusetts Department of Early Education and Care (EEC) partnered with the Center for Early Learning Funding Equity (CELFE) at Northern Illinois University to develop a cost estimation model that accurately reflected the true cost of care for providers across the state. CELFE found that the cost of providing high-quality care in Massachusetts far outpaced subsidy reimbursement rates, and that geographic disparities in reimbursement rates existed across regions of the state.
Using data from the CELFE study, EEC proposed and implemented reforms to the rate structure for FY 2024, supported by $65 million for rate increases in the Healey Administration’s FY 2024 budget. EEC’s rate reform proposal, implemented on February 1, 2024 and made retroactive to July 1, 2023, gave Massachusetts child care providers a 5.5 percent increase to their daily per-child reimbursement rates. The reform also consolidated six reimbursement regions into three to reduce regional inequities in rate amounts and increased the consolidated rates for center-based care to 81 percent of the highest cost of care in the group of center-based providers.
In February 2026, the Board of Early Education and Care voted to approve the Healey Administration’s proposed increases to reimbursement rates for FY 2026, authorizing a $20 million investment to support child care providers whose reimbursement rates lag significantly behind median private tuition costs.
Sources:
Hawley, T., Portillo, M., & Nyman, S. (2023). Cost Estimation Study Final Report. Center for Early Learning Funding Equity.
Danks, A. (n.d.). Massachusetts Early Education and Care Cost Model. American Institutes for Research.
Massachusetts Taxpayers Foundation. (2024). Building Blocks: Status of Child Care Reform in Massachusetts and What Comes Next.
Massachusetts Department of Early Education and Care. (2026, February 11). Healey-Driscoll Administration Announces Higher Reimbursement Rates for Child Care Providers.
Connections to Key Early Learning Study at Harvard (ELS@H) Findings:
States and cities can and should use cost estimation models to better understand the true cost of providing high-quality, affordable early education and care. These models should, in turn, be used to set subsidy rates that support fair, living wages for educators and promote a sustainable business model for all types of early education settings. Research suggests there is a need for more accessible, affordable, and high-quality early education opportunities across the mixed-delivery system – and for better financial and professional supports for the educators who serve children and families each day; measuring and funding the true cost of care can help states and cities address these needs and achieve these goals.
Findings from the Early Learning Study at Harvard (ELS@H) show:
- Families rely on a range of formal (e.g., Head Start, center-based care, public pre-K) and more informal (e.g., home-based, relative care) early education settings; when choosing a setting for their child, families balance many logistical constraints and personal preferences.
- But for many families – and especially low- and middle-income families – early education choices remain tightly constrained due to issues of affordability and supply.
- Early educators play a critical role in supporting the well-being of young children and families across setting types.
- Yet their pay, benefits, and other professional supports are often inadequate in light of the job demands and their cost of living.HawMM