Learn more about the IU Bloomington Budget Model Redesign process through the FAQs and definitions on this page, and check back for updates. Resources and training opportunities will be developed and posted as the model is further refined and the campus moves closer to implementation of the new model in FY 2027.
Budget Model Resources
FAQs
About the Model
A budget model is the method used to allocate income and expenses to academic and support units. Income includes tuition, state appropriations, and other sources. A new budget model does not create new resources.
The University Administration budget model and the campus budget models work together to support the complex structure and broad offerings of Indiana University. IU is composed of eight campuses and a central university administration (UA) that provides services to all campuses. The UA budget model is the method used to ensure that university-level services have the revenue they need to provide their services and resources to campuses, including information technology, research support, human resources, capital planning and facilities, finance and budgeting, and others. For more information about the UA budget model redesign process, visit IU's Budget Model Redesign Initiative.
The current landscape of higher education has changed dramatically. The new model will better enable the university to meet its core missions of teaching, research, and service within this new environment while also implementing strategic initiatives, fostering productivity, and ensuring fiscal sustainability. With a modernized, predictable model, IU will be better positioned for centralized planning and accountability while still encouraging innovation and collaboration across IU campuses.
As part of this systemwide budget redesign initiative, Executive Vice President & Provost Rahul Shrivastav convened and charged an IUB Budget Model Redesign Steering Committee with re-envisioning the IUB budget model. The initial committee was composed of representation from the Bloomington Faculty Council (BFC) and BFC’s Budget Affairs Committee; academic deans; vice provosts; and top financial staff from across the campus. Membership included:
- Aimee Heeter, co-chair, Vice Provost for Finance and Administration
- Ash Soni, co-chair, Dean Emeritus, Kelley School of Business
- Abra Bush, Dean, Jacobs School of Music
- Danielle DeSawal, Clinical Professor & Coordinator of Higher Education & Student Affairs, School of Education; President, Bloomington Faculty Council
- William Hetrick, Professor, Psychological and Brain Science, College of Arts & Sciences
- Elizabeth Housworth, Professor, Mathematics, College of Arts & Sciences
- Lamar Hylton, Vice Provost for Student Life
- Jawshing Arthur Liou, Associate Dean, Eskenazi School of Art, Architecture, and Design
- Samantha Tirey, Assistant Dean for Finance, School of Public Health; Bloomington Staff Council
- Vasti Torres, Vice Provost for Undergraduate Education
- Jonathan Trinidad, Senior Scientist, Chemistry, College of Arts & Science; Past Co-chair, Budgetary Affairs Committee of the Bloomington Faculty Council
- Rick Van Kooten, Executive Dean, College of Arts and Sciences
- Michael Willett, Executive Assistant Dean for Academic Affairs and Enrollment, School of Public Health
- R.J. Woodring, Associate Dean for Educational Programs, O’Neill School of Public and Environmental Affairs
During the development phases of the model, the IUB Budget Model Redesign Steering Committee will continue to review findings from scenario planning, modeling, and other fiscal analyses. A standing IUB Financial Advisory Committee will be established, consisting of the Chancellor, Provost, Vice Provost for Finance & Administration, Academic Leadership (deans and BFC/BAC), administrative leadership (Staff Council member), and a student member. The committee will meet regularly, beginning in FY 2027 to review the budget model, its impacts, and campus priorities, and to make recommendations to campus leadership.
FY 2025 (Fall 2024, Spring 2025, Summer 2025) - Conceptual Model redesign and development: The conceptual model outlines the basic methodology but without the precision of the final formula.
FY 2026 (Fall 2025, Spring 2026, Summer 2026) - Prototype Model development and refinement: The prototype model will use actual numbers and run multiple scenarios to refine the model and evaluate impact on each unit as well as for the campus as a whole. It will run parallel to the existing budget model for FY 2026.
FY 2027 (Fall 2026, Spring 2027, Summer 2027) - Functional Model implementation: This will be the first full-year implementation of the new model that may be phased in over a period of time.
FY 2028 and beyond - Functional Model implementation and ongoing review.
The Vice Provost for Finance & Administration and members of the Steering Committee welcome the opportunity to meet with units to discuss and answer questions about the new model. If your unit is interested in hosting an information session for your team, please submit your request to the Office of Finance, Administration & Budget.
Funding
The Bloomington campus receives funding from undergraduate tuition and fees, graduate tuition, state funding, grants and contracts, gifts from IU donors, and through services and sales.
Academic units at IUB receive funding from multiple sources, including undergraduate and graduate tuition and fees, state appropriations, grants and contracts, IU Foundation funding, and other sources such as sales or services they provide. For an in-depth discussion on how those funds are allocated, please visit the Conceptual Budget Model.
The campus and its many units have multiple sources of funding for strategic initiatives. At the campus level, a portion of funding from tuition revenues and state appropriations will be set aside for the Strategic Funding pool. These funds will support 1) the Provost Fund, from which units annually request funding for their strategic priorities that align with campus priorities, 2) IUB 2030 strategic initiatives, such as the Academic Advising initiative, and 3) faculty hiring initiatives, such as Faculty 100. Additionally, academic and support units often reallocate funds within their budgets to support strategic initiatives and innovation.
The new budget model encourages interdisciplinary programming in several ways. First, the budget model incentivizes academic units to innovate in areas that appeal to student interest and demand, including interdisciplinary offerings. Second, the Strategic Funding pool, which includes the Provost Fund and funding for other IUB 2030 priorities, supports interdisciplinary activity. Throughout the prototype model, the Steering Committee will purposefully consider how to remove barriers to and encourage interdisciplinary work between units and programs.
Every university and campus needs a system for allocating "overhead expenses," including general administration, facilities, and the cost of various support services such as Libraries, Student Life, Undergraduate Education, the Graduate School, Enrollment Management, Faculty and Academic Affairs, and general finance and administration. With accountability, predictability, and transparency as its guiding priorities, the committee recommends a metric-based formula to allocate these expenses. This also aligns with the university model framework for allocating central costs and services. It provides a track record of how allocations are determined and creates a data-driven model to fairly allocate expenses while ensuring the campus can prioritize campus needs. In general, these data-based methodologies provide incentives to 1) control costs through planning, 2) find administrative efficiencies, and 3) reallocate resources to common good priorities when possible.
The campus is continuing to collect feedback and will review alternatives that develop during campus conversations before determining the final model for allocating central expenses.
Indiana University recently implemented a new formula for distributing Indirect Cost Recovery (ICR) received on grants and contracts. ICR covers the "overhead" costs associated with any research project (such as IT services, HR, finance, Research Administration, etc.). In the new formula, 30% of ICR goes to the Office of the Vice President for Research to support high-impact research that crosses academic disciplines, to expand the services that support our researchers as they apply for and manage awards, and to ensure the appropriate infrastructure is in place for our world-class researchers. The remaining 70% flows directly to the school where the Principal Investigator resides.
For FAQs related to the university’s budget model, please visit Indiana University Finance.
Definitions
The school of instruction is the school offering a course. For example, if a math major takes a songwriting course in the Jacobs School of Music, Jacobs would be the school of instruction.
The school of record is the "major" school of a student. For example, the school of record for a student majoring in Mathematics would be the College of Arts and Sciences, since the Department of Mathematics is within the College.
For purposes of the new budget model credit hour allocation, a student with one major will be counted toward the school of record. A student with two or more majors from different schools or from different divisions of the College will be counted in each respective school. For example, a student majoring in Math and Piano would be counted as a major in both the College of Arts & Sciences and the Jacobs School of Music.
Indiana University receives tuition from undergraduate and graduate students. Tuition income (also called tuition revenue) flows first to the campus and is then distributed to academic units and support units based on the new budget model formula.
Different academic disciplines and types of classes have different costs associated with teaching and providing programming and support for their students. At IUB, schools have Program Fees to reflect the differential costs (this is referred to as "Differential Tuition" in some other institutions).
At the Indiana University Bloomington campus, academic units include the College of Arts & Sciences and all schools and programs that provide instruction to students, such as the School of Education or Jacobs School of Music. For a complete list, visit IU Bloomington's schools.
At the Indiana University Bloomington campus, support units include the offices that provide services across the campus such as Student Life, Undergraduate Education, Enrollment Management, the Graduate School, Faculty & Academic Affairs, Research, Equity and Inclusion, and Finance & Administration.
Undergraduate Tuition is composed of tuition payments from all undergraduate students, including Indiana residents (who pay in-state tuition) and non-resident students (who pay out-of-state tuition).
Undergraduate Financial Aid is provided to many IUB students in the form of merit- and/or needs-based aid. Needs-based aid helps ensure that an undergraduate education remains affordable to students from families with financial need. Merit aid allows IUB to attract highly talented students. Many students receive both merit- and needs-based aid. Additional forms of financial aid are also available to students through the IU Foundation and other scholarship sources.
This pool of funding is set aside to support campus strategic initiatives, including the Provost Fund, funding for IUB 2030 Strategic Plan initiatives, and various faculty hiring initiatives. Strategic Funds also includes incentive funding for deans to achieve metrics set for their academic units, such as retention, graduation, growth in research funding, and others.
This new pool of funding will be set aside for central or common good initiatives, such as annual salary pool increase to ensure greater equity across campus units; technology upgrades and life cycle replacement across units; campus safety and security enhancements; and costs of a wide array of instructional spaces.
Allocable Net Revenue is the pool of funding remaining from the Campus Funding Pool after Undergraduate Financial Aid and Strategic Funds have been taken off the top. Allocable Net Revenue is distributed based on a formula of instruction and majors.