Summary
Federal reentry funding has grown significantly in recent years, driven by bipartisan recognition that reducing recidivism requires addressing housing, employment, education, and behavioral health barriers after incarceration. The Second Chance Act grant programs, administered by the Department of Justice's Bureau of Justice Assistance, are the primary federal funding mechanism. Separately, the restoration of Pell Grant eligibility for incarcerated students in 2023 opened higher education to hundreds of thousands of people in prison and returning home.
Second Chance Act Grants
The Second Chance Act of 2007, reauthorized and expanded by the First Step Act of 2018, authorizes a suite of competitive grant programs administered by the Bureau of Justice Assistance (BJA) within the Department of Justice. These grants fund state, local, and tribal governments and nonprofit organizations to improve reentry outcomes for people returning home from incarceration. BJA typically announces Second Chance Act funding opportunities in the spring each year through grants.gov. Active grant categories in 2026 include:
- Reentry Program Grants: Fund comprehensive reentry services including mentoring, employment, housing, substance use treatment, and mental health services. Awards typically range from $300,000 to $750,000 per year over three years. Both government agencies and nonprofits are eligible.
- Statewide Recidivism Reduction Grants: Support state-level strategic planning and implementation of evidence-based recidivism reduction programs within correctional systems.
- Improving Reentry Education and Employment Outcomes: Funds programs connecting incarcerated and recently released individuals to vocational training, industry credentials, and employment.
- Children of Incarcerated Parents: Supports programs that maintain family connections for children whose parents are incarcerated, recognizing that family ties are one of the strongest predictors of successful reentry.
- Adult Reentry Drug Courts: Funds the operation of drug courts with reentry components for people transitioning from prison to the community.
DOJ Reentry Programs and the First Step Act
The First Step Act of 2018 made significant changes to federal criminal justice policy and created new programming requirements within the Federal Bureau of Prisons (BOP). The law required BOP to expand evidence-based recidivism reduction (EBRR) programs and productive activities, allowing incarcerated individuals to earn time credits toward early transfer to prerelease custody (halfway houses or home confinement). BJA distributes grants to implement the First Step Act at the state and local level through the Justice Reinvestment Initiative (JRI).
The Justice Reinvestment Initiative, a partnership between BJA and the Pew Charitable Trusts, works with states to analyze their criminal justice data, develop policy reforms, and implement evidence-based strategies to reduce recidivism and justice system costs. JRI technical assistance is provided at no cost to state and local governments. BJA also funds the Comprehensive Opioid, Stimulant, and Substance Use Program (COSSAP), which includes reentry components for individuals with substance use disorders returning from incarceration. The National Reentry Resource Center (NRRC), funded by BJA and operated by the Council of State Governments Justice Center, provides training, technical assistance, and research to reentry programs nationwide and is an excellent resource for organizations new to this work.
Housing for Formerly Incarcerated Individuals
Housing is consistently identified as the most critical need for people returning from incarceration, and federal policy has evolved to remove some barriers. HUD issued guidance in 2022 clarifying that public housing authorities and HUD-assisted housing providers should not have blanket exclusions of people with criminal records and must conduct individualized assessments. However, significant discretion remains at the local level, and barriers persist in many communities.
HUD's Reentry Housing Pilot Program, funded through the Consolidated Appropriations Act, provides grants to PHAs and nonprofit organizations to develop and operate transitional and permanent housing for people recently released from incarceration. The pilot targeted cities with high rates of incarceration and limited reentry housing resources. The HUD-DOJ Pilot Program on Expanding Second Chance Housing has also funded partnerships between housing and criminal justice agencies to create new housing options. At the state level, Second Chance Act grantees often include a housing component, and SAMHSA's reentry grants specifically fund housing support for individuals with behavioral health disorders leaving incarceration. Organizations developing transitional housing for returning citizens should also explore HUD's Community Development Block Grant (CDBG) and HOME programs as potential funding sources, as many localities use these funds for transitional housing development.
Employment and Job Training Reentry Programs
Employment is the other critical pillar of successful reentry, and multiple federal programs support workforce development for formerly incarcerated individuals. WIOA explicitly identifies ex-offenders as a priority population for Title I adult and dislocated worker services, meaning American Job Centers must serve them and can dedicate formula funds to their employment needs. Many states have created dedicated WIOA-funded reentry employment programs through their workforce development boards.
The Department of Labor's Reintegration of Ex-Offenders (RExO) program (now part of the broader Reentry Employment Opportunities initiative) funds organizations providing job training, placement, and mentoring to formerly incarcerated young adults ages 18–34. The Fair Chance Business Pledge, while not a grant program, represents a federal effort to encourage employers to adopt fair chance hiring practices and consider applicants with records based on their qualifications. Federal contractors are now subject to Ban the Box requirements, delayed consideration of criminal history until after a conditional offer of employment. The Work Opportunity Tax Credit (WOTC) provides a federal tax credit of up to $2,400 to employers who hire individuals convicted of a felony within one year of their conviction or release from prison — an important financial incentive for employers willing to hire from this population that employment organizations should regularly communicate to hiring partners.
Pell Grant Restoration and Higher Education Access
One of the most significant policy changes affecting formerly incarcerated individuals in recent years was the full restoration of federal Pell Grant eligibility for incarcerated students, effective July 1, 2023. Prior to this change, the Higher Education Act had banned Pell Grant eligibility for incarcerated individuals since 1994. The restoration means that incarcerated people in federal and state prisons can now use federal student financial aid, including Pell Grants, to pursue postsecondary education while incarcerated — significantly expanding access to in-prison college programs.
For people returning home from incarceration, Pell Grant restoration means that they can also access federal financial aid for community college, vocational training, and four-year degree programs after release, removing a major financial barrier to education that previously applied to people with drug-related convictions. The Second Chance Pell Pilot Program, which had operated since 2015 in advance of the formal restoration, demonstrated significantly reduced recidivism rates among participants, providing the evidence base for the policy change. Incarcerated individuals and returning citizens can learn more about FAFSA and Pell Grant eligibility at studentaid.gov. Correctional education programs within prisons and jails can become eligible training providers and partner with community colleges to offer accredited coursework, with Pell Grant funding covering student tuition costs for eligible participants.