To address significant state and federal funding cuts, including a $60 million reduction in annual state appropriations, Indiana University is taking proactive steps to reduce expenses while continuing to make strategic investments that strengthen IU’s impact.

“Reduced funding demands difficult choices, but nothing will distract us from our core mission as Indiana’s flagship university,” IU President Pamela Whitten said. “We will continue to prioritize and dedicate our resources toward creating a vibrant future for our students, while powering world-class discovery and making a tangible impact on the lives of the residents of our state.”

The university will make these strategic and targeted cost reductions in two phases, identifying up to $200 million in total savings.

In phase one, IU plans to cut over $100 million in expenses in response to state reductions and additional anticipated federal impacts. The reductions will be included in IU’s 2026 operating budget, which will be presented at the June Board of Trustees meeting. The university’s 2026 fiscal year begins July 1.

Three key principles have shaped this first phase of proposed cost reductions:

• Preserving access to an IU degree by holding tuition flat for in-state undergraduate students, consistent with guidance from the Indiana Commission for Higher Education.
• Continuing to invest in faculty and staff by providing a 2% salary increase for fiscal year 2026.
• Making deliberate and targeted reductions in expenses — rather than broad, indiscriminate cuts — to ensure continued investment in the university’s mission of educating students and conducting world-class research.

This initial phase includes plans to eliminate select unfilled positions at both campus and university administration levels, limit operational expenses (including travel expenditures and general supplies), and scale back support for some non-academic programs and benefits.

The second phase of expense reductions will begin this summer. Whitten has charged a committee of campus executive leaders to direct a new IU Work Smarter Initiative. The committee will, in collaboration with stakeholders across their campuses, develop recommendations to the president for optimizing existing programs and enhancing the efficiency of university operations.