The Justice Department and the Department of Education will announce on Friday a limited pilot program for incarcerated Americans to apply for federal Pell grants.
The program builds on efforts from the White House to provide pathways out of prison by reducing sentences and giving second chances to those who have served time.
Obama recently commuted the sentences of 46 prisoners and became the first sitting president to visit a federal prison when he traveled to El Reno, Oklahoma.
Unlike student loans, Pell grants do not have to be repaid.
A 2013 study from the RAND Corporation found that prisoners who take education courses are 43 percent less likely to return to prison within three years than those who did not participate in programs.