Develop programs that provide a STRONG incentive for Federal inmates to educate themselves out of prison.
Set up a program that provides an education to all those serving prison sentences that would provide real and useful skills in the real world so those who finally are released have a financial incentive NOT to return to prison (because they MIGHT actually be able to find a job).
It would work something like this: While incarcerated: X # weeks early release for completing a GED, more for a technical diploma, more for an associate's degree, more for a B.S. degree, and possibly higher degrees. Time could be enhanced for exceptional effort and exceptional grades.
The inmate would be required to pay, through in-house work programs, more and more of the actual costs for higher degree(s).
Increased education attainment can be used to put the inmate to work teaching other inmates who lack basic education skills.
How would this save government money? It seems a majority of committed criminals lack a decent education and typically come from lower economic backgrounds. Under ideal conditions, the majority of them, sans their criminal history, would likely be eligible for federal student programs anyway. Evidence shows that educated persons are much less likely to commit crimes than those who are uneducated and lack hope for a future in the work force or to give back to society with their knowledge.
The overall cost of educating a person is much less than housing them in prisons (money saved) and provides more stable families (less welfare families) and a tax revenue source (incoming tax revenue).
Of course this program would not be made available to illegal aliens residing in prisons.