As the fall semester begins, many families are matching actual college bills against savings, financial aid, and tighter federal loan limits. Costs vary by school, but Michigan public universities have approved tuition increases for 2026–27, and new Parent PLUS caps now apply to many first-time parent borrowers. The goal here is a calm, practical way to map the bill and close gaps without over-borrowing.
What Has Changed for Fall 2026
College prices
National published tuition and fees for 2025–26 rose 2.9% at public four-year in-state campuses and 3.4% for out-of-state students, according to College Board. For the 2026–27 year now starting, several Michigan publics have already posted increases, including:
- University of Michigan: 3% for in-state undergraduates; 4.9% for out-of-state undergraduates
- Michigan State University: 3.99% tuition increase; housing and dining rates were also increased
- Wayne State University: 4%
- Eastern Michigan University: 2.5% for undergraduates
Your student’s bill is still school-specific. Use the school’s cost of attendance (COA), not a national average.
Parent PLUS loan limits
Parent PLUS loans used to be limited mainly to COA minus other aid. For many new Parent PLUS loans first disbursed on or after July 1, 2026, federal rules add hard caps:
- $20,000 per dependent student per year
- $65,000 lifetime maximum per dependent student
The loan still cannot exceed COA minus other financial assistance. Parents who already borrowed under the prior rules may have a limited legacy exception. Confirm your status with the school’s financial aid office or Federal Student Aid.
Map the Actual Bill Against Resources
- List the full COA
Tuition, fees, housing, meals, books, travel, and personal expenses. Separate “must pay now” items from optional costs. - Add up aid and savings
Grants, scholarships, work-study, 529 withdrawals for qualified higher-education expenses, and cash set aside for school. - Layer federal student loans first
Direct Subsidized and Unsubsidized loans for the student generally have lower rates and different repayment rules than Parent PLUS. - Apply the correct Parent PLUS limit
Use the $20,000 / $65,000 caps if they apply to you. Do not assume you can still borrow the full remaining COA. - Identify the true gap
COA minus aid minus savings minus available federal loans = the amount that must come from current income, payment plans, or other borrowing.
Practical Steps for This Fall
- Ask the financial aid office whether a professional-judgment review is possible if income or circumstances changed.
- Have the student keep applying for scholarships after the semester starts; some deadlines run into fall.
- Compare a school payment plan with extra parent borrowing before adding high-interest debt.
- If you have a 529, confirm the withdrawal is for qualified higher-education expenses and keep receipts.
- Plan year two now. Parent PLUS aggregate limits make multi-year cash-flow planning more important than it used to be.
Frequently Asked Questions
How much did college costs go up this year?
It depends on the school. National 2025–26 public four-year published tuition and fees rose 2.9% in-state and 3.4% out-of-state. Michigan publics that have announced 2026–27 rates include increases such as 2.5% (EMU), 3% (U-M in-state), about 4% (MSU and Wayne State), and 4.9% (U-M out-of-state).
What is the new Parent PLUS cap?
For many new loans disbursed on or after July 1, 2026: $20,000 per year per dependent student and $65,000 total per student, and not more than COA minus other aid.
Do the new Parent PLUS caps apply if we already borrowed last year?
Not always. Some families qualify for a limited legacy exception if prior PLUS loans were already in place for the same student and program. Confirm with the school.
Should we use a 529 before borrowing more?
Often yes for qualified college costs, after comparing the tax treatment and the effect on future education savings. Michigan families should also review state tax rules with a tax professional.
What if aid plus the new PLUS limit still leaves a gap?
Options include additional scholarships, work-study or part-time work, a school payment plan, adjusting housing choices, or other borrowing. Review the full household plan before adding parent debt.
Who can help us put the whole picture together?
Covenant Financial can help families coordinate education savings, tax treatment of 529 withdrawals, cash-flow planning, and insurance needs while you work with the college financial aid office.
Looking Ahead
Rising bills and tighter parent-loan caps make a written year-by-year funding plan more important. Start with the school’s actual COA, apply aid and savings first, then borrow only what still remains after the new limits.
At Covenant Financial Group, our team is committed to faith-based stewardship and holistic solutions for families at every stage of life. From our experienced wealth managers, complex tax planning through our dedicated tax preparation division, to personal and commercial insurance via TFI Insurance, to coordinated strategy sessions with trusted partners in accounting and estate planning — we bring everything under one roof so you don’t have to piece it together alone.
Contact Covenant Financial to review your family’s college-funding plan for this year and the years ahead.