Additional closure deepens crisis

Stephanie Freeman wiped away tears as she hugged a child goodbye, telling them that she loved them and would miss them.

"This hurts," she said.

She described herself as the "hot mess express" as she closed her childcare center, Tiny Town Learning Academy on Nov. 19.

"I haven't slept in like three nights. To be honest, I don't know when I will sleep again now," she said.

The closure of Tiny Town marks yet another reduction in the available spots for childcare in Owen County, with the Owen County Family YMCA's childcare facility closing over the summer. Meaning that since July, Owen County has lost 175 childcare spots.

And Owen County isn't alone in this problem. She estimates that the state has seen approximately 60 percent of its childcare facilities close in the two months prior to closing her own business.

A Widening Need

In 2022, when the Owen County Community Foundation (OCCF) completed its five year strategic plan, one of the needs that emerged was the need for increased access to high-quality care and learning opportunities for children ages zero to five.

"We realized that it's a social issue. It's an educational issue, but it's also an economic development issue, a workforce issue, and just knowing that we needed to address it if we could," Janet Rummel, CEO of OCCF said.

But identifying the need wasn't enough.

"The issue was that there's not a lot that a community foundation can do. We don't provide childcare. We don't open a center, and so there just really wasn't any opportunity for us to move forward with any programs because there weren't any programs wanting to expand. We were having a very hard time even attracting any providers to come here," Rummel said.

Data from Brighter Futures Indiana indicate that Owen County has 1,393 children under the age of six and that 852 of those children may need care. Those defined as potentially needing care are children in either a single-parent household or a household in which both parents work. Brighter Futures Indiana data also suggests that 279 children in Owen County under the age of six are under 125 percent of the federal poverty line.

And prior to a year ago when Tiny Town expanded and added Tiny Town Learning Academy, Owen County had 267 known childcare spots throughout the county.

According to data from Early Learning Indiana, in August of 2024, Owen County's Early Learning Access Index score was 43.17, compared to a state score of 63.8. This placed Owen County as the second lowest in 10 counties throughout the Indiana Uplands Region, behind Martin County with a score of 35.02.

The other eight counties include: Brown with a score of 64.65; Crawford with a score of 44.95; Daviess with a score of 52.69; Dubois with a score of 47.86; Greene with a score of 46.13; Lawrence with a score of 51.82; Monroe with a score of 69.04; and Orange with a score of 61.17.

As a result, increasing access to affordable, high-quality childcare became the regional focus of a grant from Lilly Endowment, Inc.'s eighth phase of their Giving Indiana Funds for Tomorrow (GIFT VIII) program. The Indiana Uplands Region through the Community Foundation of Bloomington and Monroe County received a $7.8 million grant to address the issue.

A Promising Expansion

As part of the regional grant, an Owen County Childcare Coalition was created.

Stephanie Freeman, who at the time owned a series of five in-home daycares known as Tiny Town Daycare, was part of the coalition.

She wanted to expand her offerings with quality at the forefront by maintaining and providing a facility that had attained the Level 3 Paths to Quality designation, meaning that the facility had planned curriculum guides for child development and school readiness.

There are four levels, with levels one and two being that the health and safety needs of the children are met and that the environment supports children learning, respectively. The fourth and highest level is national accreditation.

The only other provider at Level 3 or higher is the Spencer-Owen Community Schools system.

"She won't do anything less, even if she's not getting paid for it. She won't do anything less," Stephanie's husband Shane Freeman said.

Then, at a coalition meeting, it was announced that HeadStart would cease offering onsite services in Owen County, making the vacant building on Hillside Avenue an ideal spot for Tiny Town's expansion.

The answer to the problem OCCF wanted to solve was right there, completely kismet, as Tiny Town Learning Academy was created, adding 80 spots to the 60 spots provided through Tiny Town Daycare.

"It was going to be great because it was going to be 80 additional seats. And other than the school system, she was the only provider in Owen County that was a level three on the Paths to Quality. So it would be high quality and those additional seats, so we were really excited about that," Rummel said.

In the summer of 2024, Stephanie and Shane Freeman presented OCCF with a detailed business plan for the expansion.

"We felt very comfortable with the business plan and the waitlist that she had. We felt like this was going to really fill a big gap," Rummel said.

OCCF gave Tiny Town Learning Academy a $150,000 grant for the purchase of materials for expansion, but Stephanie Freeman still needed additional funding to complete the necessary renovations to the building to meet state requirements.

So OCCF did something they hadn't done before: invest in a local business.

"We made our very first ever community investment loan," Rummel said.

Typically community foundations invest their permanent resources in traditional forms of investments.

"But as long as an investment would meet our investment target for our return, we're able to do other investments. So this was our first time that we made our investment locally, and so we did a loan for her," Rummel said. "We felt based on the business plan that everything would go smoothly."

They were given a three-year loan with the first year bringing interest payments only.

The Freemans were also optimistic about Tiny Town's future.

"It should have been great… And it should have been excellent for everybody involved, the parents, the teachers, the kids, you know, the community," Shane Freeman said. "They were very important partners in this venture, as far as coming to the center, and we're very thankful for it."

And it was working.

"The business plan was working fine. She was meeting her costs," Rummel said, adding that there wasn't the high staff turnover that plagues a lot of childcare facilities.

It was working, until a change at the state level trickled down.

Voucher Cuts Hit Home

In order to make childcare more affordable for low-income individuals and ensure that there is quality access to child care and educational opportunities, Indiana has a voucher program available through the Child Care Development Fund (CCDF). Some of the funding for these vouchers is provided through federal funding as well.

A few years ago, Indiana expanded eligibility requirements from 127 percent of the federal poverty level to 150 percent. But when added funding from the COVID-19 Pandemic ended and the growth exceeded what Indiana had to offer, the state had to make changes.

"So for that reason it became hard to maintain or sustain like it was, and so that's why some changes were made," Indiana Senator Rodric Bray said. Bray represents District 37, which includes parts of Owen County, and is the President Pro Tempore of the state senate.

As a result, Indiana adjusted the eligibility requirements by lowering the threshold to 135 percent of the federal poverty line and adding in a requirement that the parents must either be employed or in school.

"The bottom line is that this program, both the CCDF program as well as the On My Way PreK program have grown substantially over the last five to seven years and the funding that we have hasn't really kept pace with that. Thus the need for the waitlist that's in place right now," Bray said.

Indiana Family and Social Services Administration (FSSA) lists 31,651 children on the CCDF waitlist across the state.

The creation of that waitlist happened to coincide with the opening of Tiny Town Learning Academy.

With new vouchers not being issued, Tiny Town couldn't enroll new children.

Their hope was that the waitlist would open this fall.

"We knew something was coming. People would come in needing to go to work. We'd work out something, because we thought it'll eventually open up. So we'll go ahead and start watching the kids at a lower discounted rate, trying to help folks out trying to keep the building full, keep the employees paid, not really profiting, but in hopes it would come around," Shane Freeman said. "It's very important to us. It's not been about money. It's not really a lucrative business."

In late September, they were informed via email that the waitlist would not open until 2026. "They [said they] won't be releasing vouchers until at least—at least was the keyword—at least 2027. They originally told us it would be Oct. 1 that people would start coming off the waitlist, so we waited it out," Stephanie Freeman said. "I've been keeping this place open by the skin of my teeth."

In early November, they were told it would not be until 2027.

At the same time, the copays from parents also increased. And, according to Rummel, approximately 95 percent of the children at Tiny Town were on the vouchers.

"Parents couldn't even afford their co-pays, especially those parents that have four or five children enrolled here with us. We had some as far as over $600 a week for their children to come here, and it was just impossible for parents. I mean, it's more than their mortgage, and it just wasn't doable," MaKayla Freeman, daughter of Stephanie and Shane and an employee said. "But we also had to make the parents that were paying at a discount rate for us to stay open and keep things going at the rate that we were, we had to start making them pay full price for childcare, hoping that things would get better. And unfortunately, we had over half of our children pull out, just because they can't afford it, which is completely understandable."

To compound the problem even further, the voucher changes also impacted employees. Prior to the changes, employees of childcare facilities were moved to the top of the list and had expanded eligibility requirements to allow facilities to attract qualified employees.

"It wasn't just that they reduced the reimbursement for that, they did away with it altogether," Rummel said.

But the Freemans still tried to make it work.

"I mean, we searched high and low for a solution," Shane Freeman said, adding that sometimes payroll would come out of their personal finances.

They had a parent meeting, during which Stephanie Freeman found herself unable to even speak because she was so distraught.

"I tried to reassure the parents when I told them, 'Look, if we stay together, if the employees don't quit, because if employees quit, we can't keep the kids. If the parents pull out, we can't pay the employees. So we got to stick this out, work together, put our mouths to work and express our concerns to legislation and let them know what is going on, or we don't stand a chance,'" Shane Freeman said.

But when several families had to find care elsewhere, the delicate balance was destroyed. It left Tiny Town with approximately 20 children.

They considered using half of the building, but with no relief in sight and the inability to mix classrooms with different ages and maintain the desired level of quality, they were left with no other choice than to close both Tiny Town Daycare and Tiny Town Learning Academy.

Shane Freeman said that even without a lease, if they owned the building outright, and did not have a business loan, it would be extremely difficult for them to stay open.

"We've basically exhausted everything we have. When we're done here, we'll be able to pay the employees, and we owe a little bit on the lease," he said. "I don't know if we'll be able to pay it all. I think [the landlord is] understanding."

Community Fallout

For one parent and employee of Tiny Town, the closure means they will no longer be in the workforce, as they will be staying home with their children. They were unable to find childcare until August 2026.

The Owen News has granted the individual anonymity in an effort to minimize harm as they pursue future opportunities.

The parent had taken their children to Tiny Town for nearly a decade.

"I was a single mother at the time, and Stephanie Freeman was the only one in Owen County willing to wake up and take my children in the wee hours of the morning so I could provide for my young boys," the parent said. "She loved them with her whole heart as she did with every child she met, and they loved her."

And it isn't just this one parent.

"We've got parents calling us crying because they don't want anyone else to watch their children," MaKayla Freeman said. "They don't trust their child with anyone else. They refuse to send their child somewhere else. They have no idea what to do. And it all boils down to because they know Stephanie cares so much and that she would do anything for any child here."

The closure also impacts OCCF as a funder and partner in Tiny Town's expansion.

"We wrote off the loan and converted it to a grant, so we're out the loan essentially," Rummel said. "We were able to reclaim the purchased materials, furniture and equipment."

Some of those materials are currently being stored at Owen Valley High School, while others went to Spencer Elementary School to be used for their preschool and PreK program to be used immediately.

The loss of these CCFD vouchers has also impacted the results of the grant the Indiana Uplands Region received from Lilly Endowment, Inc.

"Since submitting the original proposal, Indiana's ECE (Early Childhood Education) landscape has undergone significant shifts, presenting new challenges. Recent cuts to the Child Care and Development Fund (CCDF) and On My Way Pre-K (OMWPK) programs have drastically decreased access to childcare assistance for qualifying families. These changes have placed additional strain on providers who rely on public funding to serve low-income families and remain financially viable. As we continue implementation, these evolving challenges may require CFBMC and its partners to adapt creatively and collaboratively. While our long-term goals remain unchanged, the reduction in public assistance funding underscores the urgency to address access, quality, staffing and affordability of ECE through innovative, community-driven solutions," a grant update report submitted on July 31 of this year reads.

The report continues, "As of May 2025, 574 children were on the CCDF waitlist across counties participating in this regional grant. The state also made changes to the OMWPK program. Enrollment has been capped at 2,500 children statewide, a sharp decrease from last year's count of 6,000. Families who are engaged in a job search are no longer eligible to apply; parents must be working, in school, or in job training. Voucher support is strictly limited to the child in Pre-K, and other siblings will require their own CCDF vouchers. Finally, voucher funding is capped at $6,800 per child per year (approximately $147.82 per week for 46 weeks), a significant decrease from the previous rate of over $300 per week. Providers must now either absorb the funding gap or pass costs on to families, threatening both affordability and sustainability. The changes to CCDF and OMWPK reduce the number of seats available, which may in turn result in staffing cuts. Neither is ideal for many reasons, including the potential implications for Ready Early Learning in the Uplands."

Additionally, the Freemans are concerned about the impact stretching beyond just closing their business.

"The ripple that they're creating is just going to be enormous, and they're not looking at the entire picture," Stephanie Freeman said.

She spoke about the importance of early childhood education and brain development for children in their first five years.

Rummel discussed how regardless of a family's socioeconomic class, access to high quality childcare yields positive results, leading to increased kindergarten readiness and greater success in school.

"I'm concerned about all of them," Freeman said of the families impacted, "but there's one mother. She's a single mother. She has three kids, she goes to work every day, and she makes $12 an hour."

He later added, "I can't get it out of my head, in my heart—$12 an hour and working every day trying to support three kids. What would that be like right now if everything's good? With inflation like it is, could you bear that mental strain of trying to support three kids and yourself on $12 an hour? I couldn't imagine.. and now, well, we're taking this and this and this away."

Rummel also brought up the challenges that children in Owen County face.

"The other thing is we know that 20 percent of the children five and under in Owen County are in poverty, which is higher than the state average… We also know particularly with the voucher students, sometimes a lot of these kids, even the little ones, they're not getting enough to eat at home," Rummel said.

She said that she has been told of children who eat more on Fridays to prepare for a weekend of not having enough to eat.

"So knowing that that's what happens, and now they're home, hopefully they are not going hungry," Rummel said.

It's a concern that Shane Freeman also cited from a previous example of a family at the in-home daycare who struggled to pay their bill, amounting to being approximately $10,000 behind.

"I'm like, 'You know, it's time; you're going to have to do something.' And then [Stephanie] looked at me, and she said, 'Well, if they're not here, I don't know if they get fed. If they're not here, they might just be locked in the basement.' And you suddenly realize $10,000 is not that important," he said.

Both also cited concerns of the increase of abuse and neglect.

"And then, also we do know that often a lack of available care can lead to increased cases of abuse and neglect," Rummel said. "I hope that's not the case, but we know statistically that's what happens."

Where Indiana Goes Next

Bray said that because 2026 is not a budget year for the legislature, they're limited on what they can do to fix the situation.

"The challenge with that is it's not a budget year," he said. "We don't typically open up the budget."

Earlier this year, the Indiana legislature had to cut $2.4 billion from the budget as the fiscal revenue forecast decreased for the upcoming two years. CCFD was one of those that was limited.

"We don't have a lot of ability to just go in and fund this more," Bray said.

He said that FSSA made some interim changes by agreeing to pay for absenteeism to help families that need childcare less than full-time. These families often struggled to find a provider, as only being compensated for the days a child attended placed a financial burden on childcare providers.

"It is a really serious challenge to be sure," Bray said of childcare, "and we need to continue to try and figure out ways to be helpful."

He said the state has tried to loosen regulations to reduce cost.

"But as we all know, when you increase regulation, government increases regulation, that makes being in business more expensive, and so we've tried to roll that back some over the last few years and in certain ways that are reasonable but not careless so that businesses can operate a daycare facility that is less expensive to operate," Bray said. "And so I think that's helped some, but again, we've got more work to do here, clearly."

Shane Freeman said that they did not feel that the restrictions dropped as the support dropped.

"It sounds like you're going to make money when you look at the rates and stuff, but what you don't see is what goes on in this office, the state, the tape, the red tape, the regular regulations they have on it," he said.

Bray said that finding a solution is important to the legislature and to him.

"It's important that people know that we believe this is extremely important. Daycare has been a priority bill of ours for the last couple of years, almost every session over the last few years, I believe. It's a challenge. We recognize that it's a challenge for families that really do need this service and the State of Indiana is trying to help, although we don't really want to get fully into running daycare facilities on our own. We don't think that is a good way to go. We need to try to make sure we are partnering with facilities that will provide this and not having the state do it itself," Bray said.

He mentioned areas of the state in which companies have their own daycares and benefit from providing that service to their workforce.

"We're watching those very closely to see if that is something that we can kind of pattern a policy after at scale and expand across the state of Indiana. So we are looking very closely at that because when you have everybody partnering together — state government, the businesses that benefit, as well as the families and maybe even nonprofit organizations — maybe that's the best way to meet the need that's out there right now," he said.

That model, a tri-share split with employers, parents and local government or community foundations has been successful elsewhere.

"Through Indiana Philanthropy Alliance, I'm connected with all the community foundations around the state, and through the Lilly GIFT initiative, many foundations have tackled childcare in the last round of GIFT funding in GIFT VIII and some even did GIFT VII around childcare," Rummel said. "Montgomery County opened one recently, and it's a 100-seat facility, so they made a lot of gains. But unfortunately, just like here, they just had three providers close. So it's almost like every time you make a step forward, it's two steps back. It's really upsetting. Until our state government puts money and local governments too put money into this, I just don't see how it's going to improve."

For Stephanie Freeman, re-opening another facility in the future, if legislative changes make it feasible again, isn't completely off the table, but for now, she's "just sad."

"I'm just sad all the way around. I'm sad for the state of Indiana. I'm sad that I've done this for 28 years and it's now gone. I'm sad for all the kids that I know aren't going to get fed and taken care of," she said. "I'm sad; I'm hurt. But when one door closes, another door opens, and it's in God's hands."