Child care costs more than college tuition, report says. Why is it so expensive?

When a child is born, parents are told to start saving for college, if they can. But child care costs even more in California than in-state tuition, according to a new report from the Economic Policy Institute.

Child care for an infant costs just under $22,000 a year, according to the analysis, compared with average in-state tuition of $8,786 annually for a four-year public college.

Care for a 4-year-old is $13,020 on average, which is less than a year of University of California tuition but more than a California State University school.

While those numbers may not surprise parents, the report reinforces a long-standing reality across the United States: Child care is often unaffordable, even though providers themselves make low wages.

How California compares to other states

California ranks fourth for most expensive child care in the country, behind only Washington D.C., Massachusetts and Minnesota.

Still, most of the country faces similarly steep costs. Economic Policy Institute’s analysis finds child care is more expensive than in-state tuition in 38 states. The report relies on state data obtained through the U.S. Department of Labor and the advocacy group Child Care Aware of America.

"One of the hallmarks of a middle-class lifestyle is the ability to invest in one’s children and send them to college. Families often save for years to afford public in-state tuition," reads a blog post on the data from the Economic Policy Institute. Yet child care can be an even larger burden, the authors write.

Why does it cost so much?

According to the U.S. Department of Health and Human Services, high costs stem from a "fundamentally broken child care market":

That's especially true for infant care, which has higher associated costs than care for older children.

The department also benchmarks "affordable" child care costs at no more than 7% of a family's income.

Many families don't use subsidized child care

State subsidies for care are meant to address the issue, but in California, just 14% of eligible children were enrolled in subsidized care in 2023, according to the California Budget & Policy Center.

" We have thousands of families that are making what's considered low income to moderate income wages that are expected to pay market price for child care, and it's just exorbitant," said Laura Pryor with the Budget Center. "It forces families to have to make impossible choices between finding care for their children, maintaining their employment, paying for rent, paying for food."

Elise Gould with the Economic Policy Institute said that reaching those levels will require more government intervention.

"There is not a market solution to this problem," Gould said. "And that's why we need public investments. We need better programs that we need the government to step in and help solve this affordability crisis."

Senior editor Ross Brenneman contributed to this story.