That number is down from the initial 153 students as of move-in day, because many students living in dorm rooms have changed their living arrangements. However, many of the students living in lounges will not get to switch to a dorm so soon.
This situation is poor planning on IU's part and unfair to freshmen who expected to live in a dorm. It appears the school wants all of the tuition money from these freshmen without even considering if they have the amenities to properly take care of them.
Living in a dorm is part of the essential freshman experience. Many freshmen rely on living in the residence halls to make friends. This is not to say that freshmen living in the lounge will not make friends, as they are still living in residence halls, but since they will all eventually have to move from the lounges to new buildings, they will still have to meet new people in their new locations.
Having an increased number of roommates also means less privacy for those living inside the lounge. The lounge is usually placed at the center of the hallways in residence halls with easy access for all of the students.
Having five roommates is different from having just one or two, like in most dorm rooms. There is nowhere these students can go to be alone or be with just one or two other people. While residential living generally means less privacy, it is not comparable to living in one room with five other people.
There are still some positive elements to the situation. Cohabitation is an important life skill, and learning to live with many others is good preparation for the future, when one might need to stay in crowded apartments or hostels. It is also important just to learn to live and exist with others. But for a freshman in college, having one roommate is enough.
Going forward, IU either needs to build new dorms or only accept as many freshmen as they have rooms for. Estimating that some students will switch housing assignments is not enough. Every freshman that signs up to live in a dorm should be able to have one on move-in day.
Hopefully in the future, IU will make sure it can properly accommodate all of its freshman class.