The Ann Arbor school's decision brings the tab to nearly $13,000 for most freshmen and sophomores. The increase adds $360 per year for most students.
Still, AnnArbor.com reports (http://bit.ly/Mx3O5x) it's the university's second-lowest tuition increase in a decade.
Tuition for non-residents also will increase, rising by 3.5 percent and reaching more than $39,000. It adds $1,340 per year for most out-of-state students.
Tuition for graduate students is set to rise an average of 3 percent.
The increases passed in a 5-3 vote by the Board of Regents on Thursday.
University officials calculate that over the course of 11 years, state appropriations to the school have dropped by $178 million. That's after adjusting for inflation.