Jordan Brown | December 18th, 2025

Types of 0-5 Early Learning Environments

For many, the term “child care” may bring to mind a colorful and cheerfully-named building they pass on the way to work. These programs are visible and easily recognizable fixtures in the community, and they play an important role in nurturing young children. But centers like these make up only a portion of the early learning settings available to young children. In fact, there are a variety of settings that deliver early education and care, each of which play an important role in meeting families’ needs.

Formal child care, which includes child care centers and family child care homes, are fee-based programs that provide full-day, year round programming. Public prekindergarten and Head Start are free, publicly-funded formal early learning programs available to certain eligible families in Texas. Each of these settings follow formal health and safety standards regulated by the state and provide developmentally appropriate curriculum and early learning opportunities.

Informal child care—termed Family, Friend, and Neighbor (FFN) Care—is also incredibly common in the United States. In fact, 1 in 4 children under the age of five is cared for by a grandparent. Many parents choose this option because it is affordable, flexible, and trustworthy. Others come to rely on FFN caregivers when formal care is not an option, either because nearby programs can’t meet their needs (if the parents have odd working hours) or, most commonly, because the tuition is too expensive.

The needs of Texas’ families are broad and diverse, and ensuring that parents have options when considering the best early learning environment for their child is critical. In this article we will explore the different types of learning environments in Texas and how they meet the differing needs of families. We will examine why the options for child care in Texas are not quite as accessible as they seem, and how this often leaves families with little decision-making power.

Center-Based Child Care

Child care centers are brick-and-mortar programs licensed and regulated by the Health and Human Services Commission (HHSC). There are a variety of child care operator types, including independently owned small businesses, corporate chains, non-profits, or church-based programs. These programs may participate in the Texas Rising Star program, making them eligible to enroll students in the Texas Workforce Commission’s (TWC) Child Care Scholarship program and receive support via TWC’s quality initiatives.

In 2024, there were approximately 8,626 licensed child care centers in Texas with the capacity to serve a population of around 770,000 children. 3,042 programs were participating in Texas Rising Star (TRS) with TWC, meaning they have committed to higher quality standards. These programs primarily serve children from infancy to age 7, with some extending to older children during the after-school hours. The average center in Texas can legally serve around 118 children, although many programs typically assume enrollment at around 75% of their licensed capacity in order to maintain stronger safety and staffing standards.

Home-Based Child Care

Home-based child care, also known as family child care, encompasses a range of operations where children are cared for in the caregiver’s home—from small, relative care to licensed care monitored by the state. Home-based child care is often chosen by parents who need flexible hours beyond the standard 8-5 workday (e.g., public safety, healthcare, hospitality, and other shift-driven roles). They are also popular with parents raising infants or toddlers who prefer a more intimate setting, or those living in rural areas where center-based care is less prevalent.

Licensed family child care homes are eligible to participate in TWC’s Texas Rising Star program and serve children enrolled in the Child Care Scholarship (CCS) program. In 2024, 303 licensed child care homes who served children receiving CCS were TRS-rated (TWC Child Care by the Numbers; note that TWC programmatic data includes only programs and children participating in CCS; full licensing data is held by HHSC). Home-based operations often begin as unregulated, popping up based on community need.

Texas Rising Star (TRS) is a quality rating and improvement system for licensed child care programs who exceed the Child Care Regulation minimum standards. Programs begin at Entry Level designation and advance to TRS-2, -3, and 4-star certifications. Benefits of participation include enhanced child care scholarship rates, one-on-one mentorship, and preferred eligibility for local support, such as grants, curriculum, and stipends.

In 2024, the Health and Human Services Commission (HHSC) encountered 2,475 unregulated home-based child care operations. These homes are not listed with HHSC and therefore were not held accountable to the basic health and safety standards set by the state. HHSC’s Unregulated Operations Unit is dedicated to integrating unregulated homes into the system to ensure children are safe and caregivers are accounted for. They also equip caregivers with tools to more effectively grow their business.

HHSC has defined three tiers of regulation for home-based child care programs:

• Listed Family Homes are smaller in operation and thus receive less regulation. HHSC does not apply additional standards besides requiring the caregivers to receive background checks and capping the number of children they can legally watch. This allows home-based operations to provide affordable, accessible care to their local community without being overburdened with paperwork and training requirements. Listed Family Homes may care for up to 3 unrelated children regularly for pay (in addition to their related children).
• Registered Homes can care for up to 6 unrelated children and must meet the minimum health and safety standards set by HHSC. Both licensed and registered homes can accept CCS and become certified by Texas Rising Star.
• Licensed Child Care Homes receive the highest level of oversight and must meet strict health and safety standards set by HHSC, similar to the rigor of center-based care. They may care for between 7-12 children regularly.

One important distinction between types of listed homes is that CCS can be used to pay relative-only listed home caregivers a daily rate. This distinction between relative and non-relative care is made by TWC (and not explicitly by HHSC) due to the federal government’s requirement for relative caregivers to be eligible for CCS (Read more: How Does the Texas Child Care System Work?). But in FY24, relative family homes cared for only 234 CCS children in Texas (page 69), less than 0.5% of the total population served.

Brief overviews provided by HHSC: Child Care Home Provider Types; What are the Types of Child Care Operations?

Publicly-funded Early Learning

Public Prekindergarten is funded by the state of Texas and delivered by public school districts with oversight from the Texas Education Agency. Children ages 3 and 4 who meet certain eligibility criteria can enroll in half-day or full-day pre-k classes for free. In 2024, over 240,000 children were enrolled in public pre-k. Given the high costs of private child care, public prekindergarten is a necessary option for many families. Children who enroll in public pre-k can benefit from additional public school resources, such as district curriculum, testing, and special student services.

Head Start and Early Head Start are federally funded programs aimed at supporting highly vulnerable young children through high-quality early education and intensive wraparound supports. The program is operated via a grant system, in which non-profits, public schools, and other local organizations administer services locally. Head Start is known to be highly effective in educating young children who are being raised in difficult circumstances, such as poverty, homelessness, and foster care. There are nearly 240,000 eligible children in Texas, but due to limited availability, only 22% of eligible children were served in 2024.

Challenges: The Illusion of Choice

Texas is a state committed to ensuring families have access to a variety of educational options for their children. However, while many options exist for families of young learners—each of which provide distinct benefits—the ability to access the setting of their choice is often limited, either due to financial constraints or limited availability. This illusion of choice often forces families to make compromises that may not fully align with their preferences or needs.

Unaffordability

The private child care model is incredibly labor-intensive, requiring small teacher-to-student ratios to maintain child safety. This is particularly true for infant classrooms, where the minimum ratio is 1 teacher to 4 children and quickly becomes more expensive than families can afford. Many child care providers struggle to fill empty seats because parents have been priced out of the market. In Texas, Child Care Scholarships provide financial assistance to help some low-income families afford child care. However, with limited federal funding, nearly 100,000 families are still waiting for this assistance—without it, they cannot afford a private child care option. (Read more: How is the Child Care System Funded?)

Lack of Viable Options

Despite a quarter of children nationwide needing care beyond the traditional 8-5 workday, only 8% of centers and 32% of homes offer it. Extending hours usually requires child care directors to hire more staff and take on additional operational costs, something that most programs do not have the financial margins to absorb without further raising costs to parents. Infant care is another costly venture for child care programs (and thus parents); with little structural support for serving infants, many programs have converted classrooms to preschool and afterschool, where the ratios are more affordable. Texas has relied on home-based programs to provide the bulk of after-hours care and infant care, but these vital programs have been closing at an alarming rate since the pandemic. The number of registered and licensed child care homes in Texas decreased by 24% between 2019 and 2024.

While publicly funded prekindergarten and Head Start programs provide a free and sometimes discounted option for some families, their hours are limited to the 9:00 am-2:30 pm school day, creating complications for parents with traditional work hours. Even FFN caregivers such as grandparents are limited in the amount of time they can care for a child, leaving parents to cobble together various solutions or take time off during the workday to move their children between arrangements.

When There’s Nowhere to Go…

When families can’t send their child to a formal care setting and don’t have nearby relatives to lean on, often the final resort is to have one parent quit their job to care for children at home, which can last for years at a time. In fact, 60% of non-working parents say child care is a top reason they do not participate in the workforce. It is disproportionally impacting women, who have begun to leave the workforce by the 100,000s as flexible career options like teleworking begin to decline. This can create long lasting financial implications for families. Mothers who exit the workforce for five years face a financial loss of $450,000 to $1 million when factoring in lost wages, retirement savings, and lifetime earnings potential. For families who can’t afford to live on a single income, they may be forced to leave the sector that makes raising a child difficult, such as the restaurant industry—the largest private sector employer in Texas—which typically employs people of childbearing age.

Opportunities in Texas

To ensure that families of young learners truly have the ability to choose an early learning setting that works best for their child, Texas must work to design a more coordinated approach to early learning service delivery that addresses the accessibility, stability, and affordability of all early learning settings.

Remove Financial Barriers for Families

Voucher programs—similar to the Child Care Scholarship program, as well as the new Texas Education Freedom Accounts program—can give parents flexibility of choice by helping remove financial barriers. Expanded federal tax credits can also support financial accessibility. The expanded Child and Dependent Care Tax Credit could put up to $900 more per year in parents’ pockets to choose a formal child care setting that works for them. Additionally, the Employer-Provided Child Care Credit (45F) incentivizes employers to support their employees in accessing child care.

In addition to scaling these programs, Texas must couple these efforts with mechanisms to financially stabilize the child care system as a whole, creating more room for programs to lower tuition costs or adapt their programming to meet the needs of families in their area.

Remove Regulatory Barriers to Operation

Regulatory barriers can sometimes hinder the expansion of child care. For home-based child care, restrictions imposed by zoning laws, land lords, and residential associations can pose a threat to their ability to operate, thereby threatening parent access to necessary care. In 2025, Texas passed a law that prohibited local governments from requiring home-based child care operations to meet additional health and safety standards not required by HHSC. This was a great first step to removing barriers for these operators.

House Bill 2 (2025) also removed additional building code requirements for child care programs seeking to enter a Pre-K Partnership with a charter school. This change could open up viability for more Pre-K Partnerships, which allows families to receive publicly funded Pre-K in the context of a full-day, full-year child care program.

Established in 2025, the Quad-Agency Child Care Initiative is a new convening of state agencies with a mission to examine and resolve regulatory burdens to the system. Many stakeholders hope its members will provide a listening ear to child care providers facing challenges to their business today.

Leverage Public and Private Partnerships

In addition to scaling Pre-K Partnerships, employers can also play a vital role in expanding options for families based on the type of care their job needs.  In the fall of 2025, TWC announced the creation of a new Employer Child Care Solutions (ECCS) initiative, which will offer technical assistance to help businesses meet the child care needs of their employees. This initiative could help more employers take advantage of the newly improved 45F Tax Credits, as well as explore other options for employer-driven supports.

Learning from Other States

States are recognizing how vital accessible child care is for a well-functioning economy. As such, many are designing coordinated solutions to address supply, accessibility, and affordability.

Coordinated governance, funding, and navigation efforts

North Carolina delivers early childhood education services through 75 regional partnerships called Smart Start Networks. Each regional network aims to coordinate funding and service delivery across state, federal, local, and private early childhood programs and services, including quality improvements, capacity building, professional development, and family support. The consolidation of governance and funding at the local level provides families with a one-stop shop and considers access across early childhood settings.

Many states (including Kentucky, Arkansas, Missouri, Ohio, and West Virginia) work within the existing federal funding system and increase child care scholarship rates for programs that provide high-need care, such as after-hours care. This aims to both incentivize and stabilize the supply of high-demand offerings.

Family, Friend and Neighbor Care

While some relative caregivers are eligible to receive child care scholarships for the work they do, this program is limited. Many states provide additional educational resources for family members to feel more equipped to care for their loved one’s child. For example, Alabama created the Kids and Kin program, in which family caregivers can access educational workshops in child development and safety, among other community-building resources. Louisiana made the licensing process easier for FFN providers to become registered family child care homes, allowing them to care for more children and increase their revenue.

Employer-supported Child Care

Missouri is building off the Michigan tri-share model by leveraging the expanded Employer-Provided Child Care Credit through their new Child Care Works program. With an initial state investment of $2.5 million, the program aims to balance the cost of child care between parents, business, and the state. Eligible families can have an income up to 555% of the federal poverty level, meaning middle-income households who don’t qualify for child care scholarships (but still struggle with the cost of care) can benefit. And even more enticing: employers that participate by chipping into their employees’ child care tuition could claim up to 50% or $600,000 of qualified expenses on their federal taxes.

Conclusion

Families make early learning choices for their child for a variety of reasons. In order for the system to truly honor the unique needs and preferences of all families, Texas must ensure a diversity of accessible options ranging from formal child care, home-based care, relative care, public pre-k, and Head Start. Children who live away from relatives will need access to formal care at an affordable price point, be that in a center or a home. Children who qualify for pre-k shouldn’t face barriers to enrollment because their parent doesn’t have time to pick them up. And families who desire to have their child stay home with a parent or relative should also be supported to do so.

As the Texas economy grows, leaders must deploy solutions that consider the specific child care needs of all parents, including working parents. Texas has the tools to build a coordinated early childhood system that addresses barriers and supports families with accessing early learning across a variety of settings. This system must be equipped with the resources necessary to identify gaps and increase the supply of affordable early learning. A healthier early childhood ecosystem not only supports working families and the greater Texas economy, it better ensures young children are equipped with the foundation they need to succeed in school and in life.

Want to learn more? Read up on Canary’s Child Care Learning Series.