When my parents moved to Bloomington (I was 11) they rented for a few years - I think they found their house through a service that IU provides to faculty even though neither of them worked for IU at the time. Certainly would be worth looking into for sure. We had a nice house about 15 mins from everything, basement, 3 bedrooms, nice sized lot, for about $1100/mo I think (this was about 13 years ago tho).
I loved growing up in Bton - tons of things to do, nice public transportation once I was old enough (I took the city bus from jr. high to the public library once/wk), decent schools, nice opportunities for community service, outdoor exploration, arts, farmers market, etc. My parents still love Bloomington and I always compare every town we look at moving to to Bton. ;)