Policy Basics: The Best Beginnings Scholarship
Finding and affording child care is challenging across Montana. Many families face limited options and high costs, challenges shared by families across the country. In both 2023 and 2025, Montana policymakers committed additional state resources to support child care providers and families. Ongoing support and improvements are still needed to build a child care system that works for families, early childhood educators, and Montana’s broader economy.
The Best Beginnings Scholarship is a critical part of Montana’s child care system, helping families who are working or attending school pay for care. Strengthening the Best Beginnings Scholarship is an important strategy for supporting families and stabilizing the child care system.
Current Child Care Supply Falls Short of Demand from Working Families
In 2025, 1,147 regulated child care programs had the capacity to serve a maximum of 25,754 children.[1],[2] Capacity has grown by about 3,200 slots, or 14 percent, since 2020, but dropped by a couple hundred slots between 2024 and 2025. The current capacity meets only 56 percent of estimated demand from working families.[3] Four counties had no regulated child care programs, and 23 of Montana’s 56 counties were classified as child care deserts, with capacity meeting less than a third of the estimated demand from working families.
Finding care is especially difficult for infants and toddlers. Just 6,035 slots statewide are designated for this age group, enough to meet only 40 percent of the demand.[4],[5] Care for school-age children outside school hours or during the summer is also limited.[6]
Child care supply and demand are typically reflected as a simple equation – the number of slots should equal the number of children needing care. The reality of finding child care is much more nuanced and complicated. Simply having enough child care slots does not account for other needs and preferences. For example, families often desire a program that reflects their culture and values.
Limited child care availability affects families and Montana’s businesses and economy. Without enough child care, parents must make difficult decisions about how and whether to pursue work or education opportunities.
Child Care Makes Up a Big Expense for Families
For families that do find child care, the cost can still put it out of reach. The cost of full-time child care varies based on age, the type of facility, and geographic location within Montana. On average, parents pay $15,476 per year for center-based care and $12,007 per year for family-based child care.[7] This means child care costs more than in-state tuition at Montana State University, which is $9,440 per year.[8]
Affordable child care is essential for advancing racial and economic equity and empowering families to pursue education, training, and careers. Despite generations of systemic barriers, Black, Indigenous, and other communities of color have shown resilience, though income disparities persist. As a result, child care is disproportionately unaffordable for families of color. The average cost estimate for center-based care ($15,476) makes up 17 percent of the median family’s income.
[9] The cost of child care for Black, Indigenous, and Latinx families makes up a larger share of their income, putting child care further out of reach. When child care is less accessible for families of color, it perpetuates the cycle of having limited opportunities to work or continue their education.
Families cannot simply absorb the high cost of providing child care. Public investment plays an important role in making care more affordable for families while supporting the providers delivering it.
Best Beginnings Is a Key Part of Montana’s Child Care System
The Best Beginnings Scholarship helps families who are working or attending school afford child care. The Best Beginnings Scholarship is primarily funded through a federal block grant, with most funding supporting families who qualify for child care support. The block grant also supports child care regulation, promotes program quality, and provides services for child care businesses.
Montana contributes state dollars to meet federal matching requirements and has also made additional investments in Best Beginnings. In 2023, House Bill 648 provided $7 million annually in ongoing state funding for the program.[10] In total during state fiscal year 2026, Montana received $41.3 million from the federal block grant and $12.4 million in state funding toward child care, including the Best Beginnings Scholarship.[11]
Child care assistance looks different across states, with a lot of flexibility given to state policymakers to set eligibility requirements, copayment amounts, and other participation details. In Montana, a family is eligible for Best Beginnings if they:[12]
Have a child, age 12 or younger, or an older child with special needs;
Need child care to work, attend school, or participate in job training;
Earn at or below 185 percent of the federal poverty level, or less than about $49,300 per year for a family of three;[13] and
Meet child support requirements, if applicable.
Families receiving Temporary Assistance for Needy Families (TANF) are also eligible for Best Beginnings, and children in foster care are eligible for Best Beginnings through age 17, even without their family meeting the income or work criteria. To use Best Beginnings, a child must attend a regulated child care program. The state reimburses the provider for care, and families pay a copayment of up to 7 percent of their income.13 For example, a family of three with an income at the highest eligibility level pays a $288 monthly copayment.
Best Beginnings Reaches Only a Small Share of Families Who Could Benefit
In state fiscal year 2025, 6,748 children participated in Best Beginnings.[14] Many more children are eligible for a Best Beginnings Scholarship than receive one. Approximately 52,000 children from birth through age 12 lived in families below the current income guidelines, yet only 13 percent received child care assistance.[15] Low participation rates for child care assistance are a common trend nationwide. However, Montana falls below the national average of 20 percent.[16] Removing barriers and improving access to Best Beginnings is an important strategy for addressing child care challenges across the state.
Montana expanded Best Beginnings income eligibility in 2023 to 185 percent of the federal poverty level.[17] Once enrolled, a family can remain eligible for a 12-month period with an income up to 200 percent of the federal poverty level, or about $53,300 for a family of three. This graduated eligibility helps lessen the benefit cliff families can face after small increases in wages.[13]
Still, families earning above Montana’s current eligibility limit can struggle to afford child care. Federal guidelines allow states to serve families earning up to 85 percent of the state median
income, about 300 percent of the federal poverty level in Montana.[18],[19] In Montana, a family of three earning 85 percent of the state median income, about $83,000 per year, would spend 19 percent of their income on the average cost of infant care at a center ($15,476). Eighteen states have set eligibility criteria at or above 85 percent of the state median income.[20] Two neighboring states also have higher eligibility limits than Montana: North Dakota at 75 percent of the state median income or about 300 percent of the poverty level, and South Dakota at 209 percent of poverty.[21],[22]
Income is not the only eligibility requirement that can limit access to Best Beginnings. Montana also requires families to cooperate with child support requirements, when applicable. This additional requirement can create barriers for families, particularly single-parent families and teen parents. States do not have to require child support enforcement as a condition of receiving child care assistance, and neighboring states including North Dakota and Wyoming do not require it.[23]
Together, these data point to multiple opportunities to strengthen the Best Beginnings Scholarship: reach more families, reduce barriers for those who qualify, and improve how the program works for families and providers.
Key Strategies Can Help Improve the Best Beginnings Scholarship for Families and Providers
Strategy #1: Reach More Families Through the Best Beginnings Scholarship
Use state median income rather than the federal poverty level to determine eligibility. State median income better reflects the economic circumstances of Montana families and is already used to determine the federal maximum eligibility level. Expanding eligibility to the federal maximum of 85 percent of the state median income would reach more families struggling to afford child care.
Remove child support cooperation as an eligibility requirement. Montana requires families to cooperate with child support, if applicable, to receive Best Beginnings. This creates an additional barrier for families, including single-parent families and teen parents.
Strategy #2: Support Child Care Workers
Cover child care for child care workers regardless of income. Helping workers afford care for their own children can serve as a recruitment and retention tool for the child care workforce. When Montana piloted a Child Care Worker program between October 2023 and December 2025, turnover was cut in half among workers who received a Best Beginnings Scholarship.[24] The pilot ended when federal grant funding expired.
Strategy #3: Boost Infant and Toddler Care
Provide an infant and toddler rate premium. Infant and toddler care requires more staff, which means it costs more to provide, contributing to particularly limited supply across Montana. An additional Best Beginnings payment for infants and toddlers could help stabilize existing care and encourage providers to serve more young children.
Strategy #4: Support Child Care Providers
Reimburse providers at the maximum state rate for Best Beginnings, regardless of what they charge other families. Currently, reimbursement is limited to the amount providers charge private-pay families, even when that amount is below the cost of providing care. This can leave providers choosing between raising rates for families paying on their own or accepting lower Best Beginnings payments.
Establish payment policies that better reflect how families use child care.
Recent changes have created challenges for providers and families, particularly for school-age children and families who need more than one provider. Allowing full-time school-age care when needed and allowing payments to multiple providers within the same month would give families greater flexibility while ensuring providers are paid for the care they provide.
Moving the Needle on Child Care Requires a Growing State Investment
Improving Best Beginnings is one important piece of building a stronger child care system in Montana. The strategies outlined here require continued state investment alongside federal funding. At the same time, Montana’s child care challenges extend beyond the Best Beginnings Scholarship. Ensuring families can find and afford care also requires addressing the particularly limited supply of infant and toddler care, strengthening care for school-age children, and supporting the child care workforce.
Endnotes
[1] KIDS COUNT Data Center, “Regulated Child Care Facilities by STAR Level in Montana,” 2025.
[2] KIDS COUNT Data Center, “Regulated Child Care Capacity by STAR Level in Montana,” 2025.
[3] KIDS COUNT Data Center, “Percent of Children Under Age 6 With All Parents Working that Can Be Served by Regulated Child Care Capacity in Montana,” 2025.
[4] KIDS COUNT Data Center, “Regulated Child Care Capacity for Infants and Toddlers (Age Birth to 1) by STAR Level in Montana,” 2025.
[5] KIDS COUNT Data Center, “Percent of Infants and Toddlers With All Parents Working That Can Be Served By Regulated Child Care in Montana,” 2025.
[6] Afterschool Alliance, “Montana After 3pm, Fifth Edition,” accessed on Sep. 22, 2026.
[7] Child Care Aware of America, “2025 Child Care Affordability: Montana,” accessed on Aug. 7, 2026.
[8] Montana State University, “Estimated Expenses, 2026/2027.”
[9] Median family income by race is from table B19113A-B19113I. U.S. Census Bureau, “Median Family Income in the Past 12 Months (in 2024 Inflation-Adjusted Dollars), 2020-2024 American Community Survey 5-Year Estimates, Table B19112,” accessed on Sep. 22, 2026.
[10] O’Loughlin, H., “HB 648: Bridging the Gap to Childcare,” Montana Budget & Policy Center, June 27, 2023.
[11] Hamilton, J., Legislative Fiscal Division, “Childcare in Montana,” presentation to the Modernization and Risk Analysis Committee, Aug. 25, 2026.
[12] Department of Public Health and Human Services, “Child Care Policy Manual,” accessed on Aug. 5, 2024.
[13] Department of Public Health and Human Services, “Montana Best Beginnings Child Care Scholarship Child Care Sliding Fee Scale,” July 1, 2025.
[14] KIDS COUNT Data Center, “Children Receiving Best Beginnings Child Care Scholarship in Montana,” 2025.
[15] Eligible children (denominator of percentage) is calculated as the number of children aged birth through 12 based on 2025 population estimates multiplied by the percent of children living below 200 percent of the federal poverty level from table B17024. KIDS COUNT Data Center, “Child Population by Single Year of Age in Montana,” 2025. U.S. Census Bureau, “Age by Ratio of Income to Poverty Level in the Past 12 Months, 2020-2024 American Community Survey 5-Year Estimates, Table B17024,” accessed on Sep. 22, 2026.
[16] Rendon, J, and Swenson, K., “Estimates of Child Care Subsidy Eligibility & Receipt for Fiscal Year 2022,” Office of the Assistant Secretary for Planning & Evaluation, July 2026.
[17] Department of Public Health and Human Services, “Department Updates: Best Beginnings Childcare Subsidies,” presentation to the Children, Families, Health, and Human Services Interim Committee, Mar. 12, 2024.
[18] Congressional Research Service, “The Child Care and Development Block Grant: In Brief,” Nov. 18, 2022.
[19] The State Median Income (SMI) depends on household size. When converting the federal max of 85 percent of SMI to the poverty level, it ranges from 293 percent for a family of six, to 309 percent for a family of two. State Median Income data: The Administration for Children and Families, “FY 2027 MONTHLY State Median Income Estimates Effective Oct. 1, 2026.”
[20] Prenatal-to-3 Policy Impact Center, “Prenatal-to-3 State Policy Roadmap 2026, Child Care Subsidies,” Sep. 21, 2026.
[21] North Dakota Department of Health and Human Services, “Child Care Assistance Program,” accessed on Aug. 7, 2026. Similar to Montana, converting state median income to poverty ranges from 263 percent to 306 percent of poverty.
[22] South Dakota Department of Social Services, “Am I Eligible for Assistance,” accessed on Aug. 7, 2026.
[23] Selekman, R., and Holcomb, P., “Child Support Cooperation Requirements in Child Care Subsidy Programs and SNAP: Key Policy Considerations,” Oct. 2018.
[24] Department of Public Health and Human Services, “Child Care Worker Program,” on file with author.
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