◆ Key Takeaways
- Second Chance Act grants fund nonprofits and governments $300K–$750K/year for comprehensive reentry services — administered by DOJ's Bureau of Justice Assistance; BJA announces opportunities in spring each year on Grants.gov; eligibility extends to both government agencies and nonprofit organizations.
- Pell Grant eligibility was fully restored for incarcerated students effective July 1, 2023 — formerly incarcerated people can now access federal student aid for community college, vocational training, and four-year degrees after release; the previous ban dated to 1994.
- WIOA designates ex-offenders as a priority population at American Job Centers — services including job training, placement, and wraparound support are available at no cost through local workforce development boards; organizations can refer clients directly or apply to become approved training providers.
- HUD 2022 guidance clarified that public housing should not have blanket criminal record exclusions — PHAs must conduct individualized assessments, but significant local discretion remains; navigating PHA policies requires direct engagement with each local authority.
- Employers who hire formerly incarcerated individuals qualify for the Work Opportunity Tax Credit (WOTC) — up to $2,400 per hire — this is a practical incentive that employment-focused reentry organizations should communicate to every employer partner they work with.
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, with awards commonly ranging from $300,000 to $750,000 per year over a three-year period. Both government agencies and nonprofits are eligible applicants.
Active categories in 2026 span the range of reentry needs. The core Reentry Program Grants fund comprehensive services including mentoring, employment support, housing navigation, substance use treatment, and mental health services — the full spectrum of barriers that, when unaddressed, drive people back into the system. Statewide Recidivism Reduction Grants support state-level strategic planning and implementation of evidence-based programs within correctional systems themselves, upstream of release. The Improving Reentry Education and Employment Outcomes category funds programs connecting incarcerated and recently released individuals to vocational training, industry credentials, and job placement. Children of Incarcerated Parents grants support programs that maintain family connections during incarceration, recognizing that intact family relationships are among the strongest predictors of successful reentry — stronger, in the research literature, than most programmatic interventions. Adult Reentry Drug Courts fund the operation of drug court programs with reentry components for people transitioning from prison to the community, typically combining judicial oversight with treatment access.
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.
◆ Action Checklist
- Monitor Grants.gov for BJA Second Chance Act announcements each spring — search CFDA number 16.812 and set email alerts for new opportunities; BJA releases new solicitations annually, and deadlines typically run 60–90 days from announcement.
- Contact your state's BJA representative or Justice Reinvestment Initiative coordinator — JRI technical assistance is available at no cost to state and local governments working on recidivism reduction; this is a funding-adjacent resource that strengthens future competitive applications.
- Explore HUD CDBG and HOME programs for transitional housing development — contact your local Continuum of Care and your city or county's Community Development office; many localities have untapped CDBG funding that can support transitional housing for returning citizens.
- Register as an approved training provider in your state's WIOA Eligible Training Provider List (ETPL) — this enables your employment and vocational programs to receive WIOA Individual Training Account funding directed by American Job Center case managers toward your participants.
- Brief employer partners on the Work Opportunity Tax Credit (WOTC) — up to $2,400 per qualifying hire of a formerly incarcerated individual within one year of conviction or release; the IRS Form 8850 process is handled by the employer, and communicating this benefit consistently increases hiring partner participation.
- Direct returning citizens to studentaid.gov to check Pell Grant eligibility — the 2023 restoration removed the ban that had existed since 1994; community college enrollment for vocational credentials and degree programs is now fully financially accessible for most formerly incarcerated individuals.
Frequently Asked Questions
What is Second Chance Act funding?
The Second Chance Act, administered by the DOJ's Bureau of Justice Assistance and OJJDP, funds reentry programs for people returning from incarceration — case management, employment, housing, family reunification, and substance use treatment. Grants typically range from $500,000 to $1 million over 2 to 3 years.
Can nonprofits apply directly for reentry grants?
Yes — Second Chance Act community-based grants accept nonprofit applicants directly, and Department of Labor Reentry Employment Opportunities (REO) grants fund nonprofits serving justice-involved adults and young people. Some categories are restricted to state and local governments, so read each solicitation.
What does the Department of Labor fund in reentry?
REO grants (often $1.5 million or more over multiple years) fund employment-centered reentry: occupational training, apprenticeship pathways, subsidized employment, and job placement for justice-involved individuals. Evidence of employer partnerships substantially strengthens applications.
What outcomes do reentry funders require?
DOJ grantees report recidivism reduction along with employment, housing stability, and program completion. DOL focuses on employment placement, retention, and credential attainment. Successful applications include a data collection plan and realistic baseline comparisons from the start.