University of Calgary students will pay more this fall to attend school after the board of governors approved the creation of a controversial non-academic fee -- a move that will add millions to the university's revenues, but has disappointed students.

Starting in September, full-time undergraduate and graduate students will pay $450 in mandatory student services fees, but will be partially rebated for the first two years.

The new fee will add $4 million to the U of C's coffers for the 2010-11 academic year and about $12 million for 2012-13 when students will pay the full fee.

U of C provost Alan Harrison said it has been a difficult process to reach the decision to add the fee, but at a time when the university is approving a deficit budget, all parts of the institution have to help, including students.

"Our view is this is a shared responsibility among government, our employees, the university units and the students. They've all borne a bit of the burden," he said.

At the same time, the board of governors rejected a proposal offer from the students' union, which called on the university to tie any future increases to changes in the Alberta consumer price index and substantial hikes be put to students for a referendum.

Students' union president Charlotte Kingston was disappointed is by the decision, saying a similar proposal is in place at the University of Alberta, and students at the U of C felt it was a workable model they "wanted and deserved."

"It shows a lot of the time that articulating our voice doesn't matter as much as we hope it would," she said following the public meeting.

For graduate students who have completed course work and exams and are starting on their thesis, the fees represent a roughly 30 per cent increase in money they pay to the school, said Daniel Bidulock, acting president for the University of Calgary Graduate Students' Association.

"The impact was understated when it came to grad students," he said.

However, he added, graduate students have to be realistic about the situation.

"No one is happy with the hike but the current fiscal reality is we need this money."

The $450 for student services fees puts the University of Calgary behind only McGill University for having the highest non-academic fees among Canada's G13 Universities.

French major Allie Light said she is disappointed with the decision and she already works two jobs in the summer to pay for tuition, which her parents subsidize.

"I think we already pay enough," she said.

Fine Arts student Shelby Jansen said she's glad the new fees are being added in increments, but that financially she's already having trouble keeping up with tuition and other costs. "My education is important to me and I'm willing to pay for it," she said. "But an increase doesn't help me pay my rent."

The board did agree to a motion that stipulates there will be no student services fee increases before Aug. 31, 2013, but the fee will be subject to any regulations imposed by the provincial government on general non-program fees.