Two of America's most serious problems--crime and illiteracy--converge in our prisons. The majority of prisoners have serious educational deficits. Although prison educational programs exist, they are often ineffective because of poor program development, lack of administrative support, or small numbers of prisoners served. One innovation in prison education is the Free Venture program, which may succeed in revitalizing prison industries and in turning prisoner idleness into productivity. Elements of the Free Venture model include the following: (1) workers should be exposed to a realistic work environment; (2) prisoners should partially reimburse the state for custody and welfare costs as well as make restitution payments to victims; (3) prisoners should gradually be prepared for release into the community; (4) there should be fixed responsibilities with financial incentives and penalties for job placement of prisoners upon release into the community; (5) prison industries should receive financial incentives for successfully reintegrating offenders into the community; and (6) prison industries shou1d be self-supporting profit-making business operations. Seven states have undertaken the Free Venture plan with varying records of success and disappointment. Where the program has succeeded, its benefits are seen as fundamental changes in the nature of the prison community. (Besides an examination of the issues concerning prison education and an examination of some models of improved correctional education, this monograph contains an annotated bibliography on correctional education, keys to federal funding for education of adult offenders, and models of assessment instruments and school district legislation.) (KC)