The Indiana University Board of Trustees approved the university’s operating budget for fiscal year 2026 during its June meeting.

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. The university’s operating budget includes reducing expenses by roughly $100 million for fiscal year 2026, with three principles guiding those decisions:

• 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.

As part of its targeted reductions, IU will eliminate select unfilled positions at the campus and university administration levels, limit operational expenses (including travel expenditures and general supplies) and scale back support for some non-academic programs.

IU will continue to offer a robust benefits package to employees but will make some adjustments in response to funding challenges. The university will reduce its retirement contributions for employees by 1 percentage point beginning July 1 under the IU Retirement Plan and the IU Retirement & Savings Plan. In considering updates, the university conducted benchmarking to ensure IU’s retirement benefits remained competitive with Big Ten peers. While the full scope of contributions varies across these peer institutions, IU will remain among a select set of Big Ten institutions that does not require employees to match the university’s retirement contributions.

The budget goes into effect July 1. The university has also charged a committee of university administration and campus executive leaders to make recommendations for optimizing existing programs and enhancing the efficiency of university operations through a new IU Work Smarter Initiative.