I did my undergrad at IU, and the cost of living is very reasonable. Right now, I pay $490/month for a HUGE one-bedroom apartment within walking distance of campus. If you have roommates or are willing to live a little further away (which isn't a problem, since the bus system is great), you can live for much, much cheaper. As far as things to do, there are lots of bars, music venues, art galleries, theaters, etc. The restaurant variety is great - there are three Indian restaurants, a couple of Thai restaurants, Chinese, Japanese, Korean, Ethiopian, Greek, Turkish - everything you can imagine. And the prices are pretty reasonable, particularly for lunch (the Indian restaurants do a great lunch buffet). Groceries are really reasonable, too - you can either go with the big chain stores like Marsh or Kroger, or you can shop at the local places, which are a little pricier, but also offer more organic/locally grown products. I know a lot of people are nervous about the prospect of living in Indiana, but Bloomington really is completely different than the rest of the state. I'm going on my fifth year here and I've had a great experience. Sorry I can't offer too many specific recommendations regarding housing - I lived in the dorms for the first three years, but there isn't really a "bad" part of Bloomington. The trade-off of living close to campus is that 1) it's more expensive and 2) there are more noisy undergrads. However, I live pretty close to the stadium, and my apartment complex is surprisingly quiet (they cater to grad students and enforce a pretty strict noise policy, so that helps). I would talk to current grad students in your department if possible for more specific recommendations, but there are some really cute/affordable houses in pretty much every part of town.