Good places to stay right in town close to campus:

Local establishments:

• Scholars Inn
  • 801 North College
    Bloomington, Indiana 47404
    812.332.1892 / 800.765.3466
    www.scholarsinn.com
• Grant Street Inn
  • 310 N Grant St
    Bloomington, IN 47408-3736
    (812) 334-2353
    www.grantstinn.com‎
• Showers Inn
  • 30 N. Washington St.
    Bloomington, Indiana 47404
    812-334-9000 / 877-334-9009
    www.showersinn.com
• Indiana Memorial Union (right on campus)
  • 900 E 7th St
    Bloomington, IN 47405-3906
    (812) 855-2536
    www.imu.indiana.edu/hotel

Chains:

• Courtyard by Marriott
  • 310 S. College Avenue
    Bloomington, IN 47403
    (812) 335-8000
    website
• Hilton Garden Inn
  • 245 North College Avenue
    Bloomington, IN‎
    812-331-1335‎
    website

Note: there are plenty of other places to stay on the west side and on the bypass. But these offer nice walking distance accomodations close to town, campus, and restaurants.