Adult functional illiteracy is estimated at more than 20 percent of the U.S. population and 12-19 percent of Indiana residents over age 25 (390,000 to 600,000 adults). In addition, high school dropouts and those who do not seek education past high school also need additional training. Functional illiteracy costs government and business through industrial accidents, lost productivity, direct training costs, lost earnings, unemployment expenses, and the cost of operating prisons. The price of illiteracy too often also includes unemployment and even crime. Government has long played a role in literacy education. At the turn of the century, the federal government helped to assimilate immigrants, and many other federal literacy initiatives have been undertaken, including the National Literacy Act of 1991. Indiana has five state-level agencies contributing to literacy: the Indiana Adult Literacy Coalition; the Governor's Voluntary Action Program; the Indiana Department of Education, Division of Adult Education; the Indiana Department of Workforce Development, Office of Workforce Literacy; and the Indiana State Library. Although Indiana has made progress in adult literacy, literacy programs are still reaching only about 7 percent of the target populations. Policymakers and program developers should consider the following: adult culture, multidimensional needs, diversity, postsecondary education, business efforts, program collaboration, the balance between volunteers and professionals, establishing a superintendency of adult education, and its literacy networks when developing policies and programs to improve adult literacy in Indiana. (Contains 20 references.) (KC)