Economics
America announces no-cost child care: a first for the nation
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Fiona Alston
Sep 16, 2025
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New Mexico has become the first U.S. state to introduce free universal child care for every family, a move hailed as a historic milestone in addressing affordability and access.
From 1 November 2025, all families in New Mexico will be eligible for no-cost early childhood education and care. The reform removes income eligibility thresholds and parent copayments, ensuring every child can access learning and care regardless of family circumstances.Child care costs in the United States are among the highest in the world. In many states, the cost of caring for an infant now exceeds the price of public university tuition. Polling consistently shows that families across the political spectrum view child care affordability as one of the nation’s most pressing issues.
New Mexico’s decision to go universal is seen as a test case for whether free child care can be delivered statewide, and whether the model might influence national policy in years ahead.
From January 2026, in Australia reforms will introduce the 3 Day Guarantee, ensuring all CCS-eligible families can access at least 72 hours of subsidised care per fortnight, regardless of their work or study hours. Aboriginal and Torres Strait Islander children will continue to be entitled to 100 hours.
However, unlike New Mexico, Australian families will still need to pay a gap fee to providers.
Both countries continue to navigate challenges including rising costs, workforce shortages, and the need for funding models that address affordability for families alongside appropriate wages for educators.
New Mexico’s leap into universal free care contrasts with Australia’s incremental reforms. For families in New Mexico, the estimated savings will be around USD $12,000 per child per year, an immediate and tangible difference.
Whether Australia could, or should, follow a similar universal model remains an open question. For now, New Mexico’s bold step has placed early childhood education firmly at the centre of the policy conversation both in America and abroad.
Source: KNX News, Audacy, AP-NORC, Economic Policy Institute, U.S. Department of Labor.
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