Geoffrey Chatas, Executive Vice President and Chief Financial Officer
University of Michigan
University of Michigan
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The University of Michigan is expanding its investment in student programs and services over the coming year, dedicating funds to enhance the accessibility and affordability of a U-M degree.
The Board of Regents approved the 2025-26 fiscal year budget on June 12, reaffirming the university’s commitment to removing financial barriers for students so they can focus on academic success.
U-M’s general fund budget for FY ‘26 totals $3.0 billion for the Ann Arbor campus, with investments centered around providing life-changing education, enhancing human health and well-being, and staying true to the university’s mission while acknowledging economic and legislative uncertainty.
The final numbers reflect careful planning and targeted investments to sustain academic excellence in an uncertain funding landscape.
“We move forward with the confidence that whether we consider research funding, state support, or our students’ tuition dollars, an investment in the University of Michigan offers high return,” said Provost Laurie McCauley during her budget presentation. “In fiscal year ’26, we will broaden our investment in programs and services that enrich the U-M experience and promote student success.”
The budget for the Ann Arbor campus is part of a university-wide budget package that includes spending plans for Michigan Medicine, UM-Dearborn, UM-Flint, Athletics, Michigan Housing and supplemental student fees.
The Go Blue Guarantee will increase eligibility to families making up to $125,000, expanding access for middle-income families. Additionally, the university will fully cover the cost of attendance for GBG-eligible students in the fields of teacher education and nursing, and for those GBG graduates enrolled in the MSW program at the School of Social Work.
“Over the years, U-M has expanded eligibility, and we are proud to be a leading public institution in this arena,” McCauley said. “We thank the Regents for their unwavering support for this guarantee. The fiscal year ’26 budget funds our recently announced expansion of eligibility and increased awards to cover full cost of attendance in critical workforce areas.”
Currently, 59% of resident undergraduates receive grant or scholarship aid and 33%, or 5,730 resident undergrads, pay no tuition at all. The FY ‘26 budget increased undergraduate aid by 4.5%, greater than the rate of increase for in-state tuition and fees, and it is anticipated that in-state students with financial need will not experience any change in out-of-pocket tuition and fees.
The university will also broaden opportunity by allocating additional support for Wolverine Pathways, allowing this successful college preparation program to serve more college-aspiring students. Wolverine Pathways graduates who enroll at U-M also enjoy a free tuition guarantee.
With these increased investments, the FY ’26 budget funds $409 million in central financial aid, with schools and colleges adding additional support.
Cost containment remains at the forefront of U-M’s financial strategy, with a continued focus on operational efficiency and strategic investments. Units across campus underwent a rigorous exploration of cost-saving measures and reduced general fund spending by over $33 million for FY ‘26.
These efforts enable U-M to expand financial aid and make other strategic investments while implementing a modest tuition increase that is consistent with inflation.
In-state tuition and fees for the most common lower-division rate for undergraduates will increase by $610, or 3.4%, for an annual rate of $18,346. Tuition and fees for nonresident undergraduate students will increase by $3,016, or 4.9%, for an annual rate of $63,962.
The University Health Service fee will increase by $16, or 3.9%. This fee is a required component of tuition and supports increasing staff and operational costs. A new student recreation and wellness fee of $150 per year will support operations of the new Hadley Family Recreation and Well-Being Center, scheduled for completion in fall 2025.
Tuition and fees are based on full-time enrollment, defined as 12-18 credit hours per term for undergraduate students. Rates for most graduate programs will increase 4.9%.
Housing rates will increase $881 per year, or 6.0%, as part of a 10-year plan to enhance the student residential experience and build capacity. Under the new rates, a standard double room will cost $15,568 annually.
The university awaits information on state appropriations, which account for approximately 12% of the general fund budget. State funds are essential for the university to meet its mandatory and inflationary cost increases, and McCauley noted the importance of this partnership.
The state, which operates on a different fiscal calendar, is expected to approve the budget before the end of September.
The budget includes substantial investments in new and continuing academic programs designed to keep U-M at the forefront of higher education. In FY ’26, the Gerald R. Ford School of Public Policy and Marsal Family School of Education will each launch online master’s programs, offering professionals in these fields a flexible way to expand their skills, accelerate their careers, and lead boldly in public service.
LSA is deepening its investment in the Program for Computing in the Arts & Sciences, preparing students to analyze, critique, design and invent with technology, regardless of their chosen fields.
The budget enhances academic advising, increases the capacity of the Testing Accommodations Center, and launches robust new platforms for course scheduling, degree planning and other key supports that help students attain their goals.
The budget includes targeted investments in medical research, adaptive sports and fitness, and support for nursing education. The Biointerfaces Institute, which focuses on the juncture between physical and biological systems to generate high-impact biomedical innovations, will receive funds for new equipment upgrades.
“This collaboration between Medicine, Engineering, Pharmacy, and Dentistry leverages our world-class strength in interdisciplinary research,” McCauley said. “Since 2012, Biointerfaces has earned 119 patents and launched 25 companies. We commit funds to renew equipment for this ongoing endeavor.”
The budget continues to grow U-M’s Adaptive Sports and Fitness program, increasing participation in adaptive sports and fitness among people with and without disabilities.
The FY ’26 budget also invests essential resources to support strategic enrollment growth in top-ranked programs in the School of Nursing, whose students graduate well-positioned to provide excellent patient care and fill gaps in Michigan’s nursing workforce.
“The Ross School recognizes business as a powerful force for change,” McCauley said in remarks about the Business + Impact initiative. The initiative connects faculty, students and staff with southeastern Michigan communities through action-based partnerships.
The FY ’26 budget expands this key investment, engaging more students from across campus to make a positive impact in Detroit.
The budget continues support for the non-partisan UMICH Votes initiative, recognizing that the work of voter engagement extends beyond election cycles.
Investments in sustainability across campus are reflected in university operations and research programs. In FY ’26, the budget expands investment in the fleet of electric buses and their long-term upkeep and maintenance. Education is also a focus; the budget supports additional cross-campus curricular activities in sustainability.
The FY ’26 budget includes a modest merit program to recognize the contributions of world-class faculty and dedicated staff whose work keeps U-M strong as it navigates uncertain times.
Another high priority is digital infrastructure. This budget makes investments in the required technology, software and related services to conduct operations securely and efficiently, and to support research, instruction and innovation.
The university continues to assess the potential budgetary impacts of federal actions. To ensure the university’s strength and resilience, the administration has been monitoring expenditures, modeling budget reduction scenarios, and discussing strategy with leadership at every level of the university.
McCauley noted that the university projects indirect cost recovery revenues will decline in FY ’26, the result of federal actions and a slowdown in research awards. The university’s commitment to research remains steadfast, because of its value in fueling the innovation and discovery that is vital to the world and the shaping of the future.
As higher education faces the year ahead amid economic and legislative uncertainty, McCauley emphasized that the FY ’26 investments deepen the strengths that allow the university to weather challenging periods. The approved budget enables the university to meet its mandatory costs, provide crucial incremental resources in academic programs, research, and operations, continue its commitment to affordability, and make meaningful investments in ongoing academic excellence.
