Each update buries this setting further and further into the menus!
To increase the assignment file upload limit, go to:
Site Administration >> Plugins >> Activity Modules >> Assignment >> Submission Plugins >> File Submissions
Then just change the value in the dropdown menu box to whatever you need. If you ramp it up to site maximum then it'll change along with any settings you make to the server without having to navigate into the bowels of the admin menu all over again.
J