Many adults in the United States have low levels of literacy or numeracy, or limited English language proficiency. Under the authorization of the Adult Education and Family Literacy Act (AEFLA), the federal government has made grants to states to provide services to improve these skills among adults who are not enrolled in school. Commonly called "adult education" efforts, these investments provide educational services to adults at the secondary level and below, as well as English language training. Adult education services are typically provided by local entities using a combination of federal and non-federal funds. Students include those seeking to develop basic skills, those seeking to obtain a secondary credential, and English language learners of various educational backgrounds. Curricula vary based on student needs and objectives. According to the most recent annual data, the average adult education student received 124 hours of instruction. Adult education instructors are a combination of full-time, part-time, and volunteer personnel. AEFLA programs are administered by the U.S. Department of Education (ED) through its Office of Vocational and Adult Education (OVAE). In FY2013, appropriations under the act were $575 million. Of this appropriation, $554 million was distributed to the states via formula grants. This report will provide background information on AEFLA and the activities it funds. The report begins with a description of the law itself. This description focuses on AEFLA's largest component, the state grants program. The second half of the report uses program data to describe the implementation of the state grants program, including the data on providers and participants. AEFLA was enacted as Title II of the Workforce Investment Act of 1998 (WIA; P.L. 105-220 ). It replaced the National Literacy Act of 1991 ( P.L. 102-73 ) and the Adult Education Act of 1966 (P.L. 89-750). AEFLA authorized such sums as necessary to carry out its functions from FY1999 through FY20003. When the program was not reauthorized, the General Education Provisions Act (GEPA) automatically extended AEFLA authorization for one year. Since the expiration of this extension, the program has continued to be funded through the annual appropriations process. AEFLA reauthorization has been debated in the context of broader efforts to reauthorize WIA. The statutory purpose of AEFLA is to (1) assist adults to become literate and obtain the knowledge and skills necessary for employment and self-sufficiency; (2) assist adults who are parents to obtain the educational skills necessary to become full partners in the educational development of their children; and (3) assist adults in the completion of a secondary school education. To fulfill this purpose, statute authorizes funds for adult education activities, which it defines as services or instruction below the postsecondary level for individuals who are at least 16 years old, are not enrolled in school nor required to be enrolled in school under state law, and either (i) lack sufficient mastery of basic educational skills to enable the individuals to function effectively in society; (ii) do not have a secondary school diploma or its recognized equivalent, and have not achieved an equivalent level of education; or (iii) are unable to speak, read, or write the English language. AEFLA specifies portions of its annual appropriation that are set aside for certain programs. The remaining funds (which are typically more than 95% of the annual appropriation) are distributed to the states through formula grants. AEFLA specifies how funds are allotted to each state as well as the proportion of each state's grant that must be allotted to various activities. The act also sets criteria for how state grant funds must be subgranted to local service providers. Section 211(b) of AEFLA specifies a two-step process through which state grant funds are distributed. First, there is an initial allotment of $250,000 to each state and $100,000 to each eligible outlying area. The second step of the allotment process distributes the remainder of the funding by formula. The formula is based on each state's share of qualifying adults. Qualifying adults are those who are at least 16 years of age, beyond the age of compulsory school attendance in the states, without a high school diploma or the equivalent, and not enrolled in secondary school. States must match their grants so that 25% of the state's total adult education resources are from non-federal sources. Non-federal matches may be cash or in-kind. In outlying areas, the non-federal share must be at least 12%. AEFLA's hold harmless provisions specify that states and outlying areas shall receive grants equal to at least 90% of the grant they received in the previous fiscal year. AEFLA's maintenance of effort provisions require each state and outlying area to expend at least 90% of what it spent in the prior year on adult education activities. Table B -1 in Appendix B lists the annual allotments to each state from FY2011 to FY2013. Since FY2000, appropriations legislation has set aside a portion of the AEFLA state grant funding for integrated English literacy and civics education services (EL-Civics) to limited-English-proficient populations. In FY2013, this set-aside was $70.81 million or about 12.8% of state grants funding. The remainder of state grant funds were allotted using the formula described in the previous section. The provisions of the EL-Civics grants are enumerated in annual appropriations legislation and are not established elsewhere in law. EL-Civics funds are distributed to the states based on recent immigration data from the United States Citizenship and Immigration Services (USCIS). Typically, 65% of the EL-Civics funding is distributed based on each state's relative share of immigrants admitted for legal permanent residence in the 10 most recent years and 35% is distributed based on each state's relative share of immigrants admitted for legal permanent residence in the three most recent years. Table B -2 in Appendix B lists the annual EL-Civics allotments to each state from FY2011 to FY2013. Section 222 of AEFLA specifies several requirements on how states must allocate their grant funds: At least 82.5% of the state allotment must be competitively subgranted to local service providers. Up to 10% of the 82.5% may be granted to entities that provide services to individuals in correctional facilities or other institutionalized individuals. Up to 12.5% of the state's allotment may be allocated to state leadership activities (i.e., programs of statewide relevance such as the development and dissemination of curricula). No more than 5% of the total grant or $65,000, whichever is greater, may be used for administrative expenses. All recipients of local subgrants must use funds for the provision of one or more of the following services: adult education and literacy services, family literacy services, and/or English literacy programs. Entities eligible to receive local subgrants include local educational agencies, community and faith-based organizations, institutions of higher education, and other nonprofit organizations. AEFLA requires states to consider certain factors when selecting local subgrant recipients. Most of these considerations relate to a subgrantee's ability to successfully serve qualifying adults (particularly high-need populations) and accurately report performance data. Section 224 of AEFLA specifies that, to receive a grant, each state must submit, or have on file, a state plan. Plans are five years in duration. State plans must contain an assessment of adult education needs in the state, including high-need and hard-to-serve individuals; a description of the adult education activities that will be funded by AEFLA; a description of how the state will annually evaluate and improve its activities using standardized reporting measures (see " Performance Accountability and Reporting Requirements " subsection later in this report); a description of the process that the state will use for public participation and comment in the development of its state plan; a description of how the state will develop program strategies for certain populations such as individuals with disabilities and single parents; a description of how AEFLA-funded activities in the state will be integrated with other adult education, career development, and employment training services; and a description of steps the state will take to ensure equitable access to funds among local adult education providers. As an alternative to developing a specialized AEFLA plan, WIA allows states to develop a unified plan that combines AEFLA requirements with other federally funded workforce development programs. Section 212 establishes a performance accountability system for grantees under AEFLA. It requires grantees to track participation and other core indicators of performance. These core indicators are improvement in literacy skill levels in reading, writing, and speaking the English language; numeracy; problem solving; English language acquisition; and other literacy skills; placement or retention in, or completion of, postsecondary education, training, employment, or career advancement; and receipt of a secondary school diploma or the equivalent. States report their performance via the online National Reporting System (NRS). Reports from the NRS provide the program data presented in the " AEFLA Implementation and Program Data " section later in this report. Section 211(a) of AEFLA specifies several set-asides from sums appropriated under the act. The lesser of 1.5% of the appropriation or $8 million for National Leadership Activities (NLA). These activities can include (1) technical assistance to the states such as assistance in developing performance measures or professional development for instructors, and (2) national research activities such as curriculum development, program evaluation, and dissemination of best practices. The lesser of 1.5% of the appropriation or $8 million for the National Institute for Literacy (NIFL).