Albury Wodonga Community College's decision to close their final three centres and exit the childcare sector after more than 30 years has sparked fears other providers could follow suit.
AWCC chief executive Rodney Wangman said the 2018 transition to a new Child Care Subsidy funding model and lower attendance created an untenable financial situation for the college.
Member for Indi Helen Haines said that it was concerning that Chiltern's only childcare service would close if another provider was not found by December 2020.
"I think it could be emblematic of more to come," she said. "My office is now seeking to find out whether other centres could be affected."
Dr Haines said childcare was an essential part of viable small communities and the government needs to ensure it was accessible and affordable.
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"A one-size-fits-all funding model from the government doesn't necessarily work in a small rural community," she said.
"Childcare is not an add-on or nice-to-have, it's an essential service in a community where we want to have a thriving economy and we want to have maximum workforce participation."
Last year, when AWCC announced the shock closure of seven centres, the education department claimed it was an isolated case with other similarly funded providers still operating.
On Friday, Education Minister Dan Tehan said providers were supported through the transition to the new funding model.
"Extensive support was given to child care providers in the lead up and during the introduction of the Child Care Subsidy to ensure a smooth transition," he said.
"Under the Community Child Care Fund we are providing $333 million to eligible providers to continue to operate, and the majority of these providers are in regional and remote Australia.
"Around 1.13 million families used approved child care in the first 12 months of the Child Care Subsidy with out-of-pocket costs less than $5 an hour per child for more than 700,000 children in centre-based day Care