Indiana lawmakers' decision to cut off Frank O'Bannon Grants to state prison inmates attending college could make it harder for prisoners to find employment when they're released, supporters of the program fear.

Department of Correction officials say lawmakers allocated just $2 million a year to DOC for correctional education. That's just enough to allow incarcerated students nearing completion of their degrees to continue on to graduation, The Star Press of Muncie reported.

Statewide, nearly 2,500 incarcerated students received more than $9 million in O'Bannon grants in 2009-10. That was nearly a third of the nearly $30 million overall total awarded in O'Bannon grants year.

Claudia Braman, executive director of the State Student Assistance Commission of Indiana, said the agency had provided up to $12 million a year to fund inmates' education. But lawmakers have changed funding for the prison education program and it's now being administered through the Department of Correction.

In the past, state law said the student assistance commission "may deny assistance" to O'Bannon recipients confined at a penal facility.

"The law stated that we did not have to fund them, but we had been," Braman said. "We are now prohibited from it."

Ball State University is the largest educator of incarcerated students in Indiana. It employs nearly 80 faculty and several site managers inside five state prisons in New Castle, Michigan City, Pendleton and Bunker Hill.

Indiana State University, Grace College, Oakland City University, Purdue University North Central and Ivy Tech Community College also provide inmate education.

Ball State spokesman Tony Proudfoot said the impact of the cuts on Ball State's program hasn't been determined yet.

John Nally, the Department of Correction's education director, told The Star Press the state will have to rebuild the correctional education program as its economy recovers. He expects the DOC to stop funding bachelor's degrees and focus only on associate degrees and possibly vocational certificates in fields like welding and temperature controls.

Nally told the Tribune-Star in Terre Haute that the state will request proposals to provide post-secondary programs in the adult prison system as it looks to 2012.

Inmates can earn reductions in their sentences by obtaining college degrees while they're in prison. An associate's degree can shave off up to one year, and a bachelor's degree up to two years.

About 2,400 of the department's 28,000 inmates are currently pursuing college degrees.

"That's a big college operation, the biggest in the nation," Nally said. "There's nobody like us."