I would still apply, and even if you don’t go, at least you know you had the opportunity to attend. But to answer your question, yeah UMich can be very expensive for its OOS students, especially when your family has a relatively higher efc which I believe you do. Part of the reason the npc may have calculated that number for you to attend may have had to do with other factors such as how much your family has in assets. If you listed for instance $200k in assets, then the fin aid officers believe that can be used towards your educational expenses.
Good luck!