This study to develop an education and training (E&T) system for inmates in Federal correctional institutions described and evaluated existing E&T systems and needs at Milan, Michigan, and Terre Haute, Indiana; formulated an E&T model; and made specific recommendations for implementation of each point in the model. A systems analysis approach was used throughout the study. Weaknesses were found in institutional objectives, vocational training, counseling, educational planning, staff development, and other aspects of existing programs. Elements of the proposed E&T model were objectives, job market information, classification and assignment functions, guidance and counseling service, reward system, instructional staff, curriculum and methods of instruction, job placement service, and evaluation methods. Implications for penal administration and education were also noted, together with expected benefits in terms of helping inmates become productive members of society. (The document includes four charts and one table.) (ly)