In a move that has drawn both praise and fire from all sides, the Ontario government has lowered the cap on tuition hikes to 3 per cent annually for the next four years, down from the 5 per cent rate that had made them the highest in the country.

To universities already grappling with the lowest per-student grants in Canada, it means a loss of about $459 million in revenue over four years, warned Bonnie Patterson, president of the Council of Ontario Universities, and could lead to larger classes, fewer courses and more part-time teachers.

“It won’t be business as usual going forward,” she noted.

But for students, allowing any more raises at all is “frustrating,” said Sarah Jayne King, chairperson of the Canadian Federation of Students-Ontario, which had wanted tuition to be cut by 30 per cent over three years.

“With food bank use on campus on the rise and untold numbers of youth being shut out of education, these increases will put college and university education further out of reach,” said King.

However, MPP Brad Duguid, minister of training, colleges and universities, called the new cap “a balance” that will save the average university student about $1,200 over the next four years and represents about 1 per cent more than the inflation rate, which has averaged 2 per cent over the past decade.

Duguid admitted the lower tuition increases will pose a challenge for institutions, which already receive the lowest per-student grants in the country.

“It won’t be easy, and we’re challenging our institutions but we’ll work together with them to offset the impact,” said Duguid, citing the 30 per cent Ontario tuition grant for students whose family income is not more than $160,000.

The new 3 per cent cap applies to undergraduates, while graduate and professional programs face increases of an average of 5 per cent — down from 8 per cent over the past seven years.

Community colleges were disappointed at the lower cap; with an average tuition of $2,400 a year — among the lowest in Canada — they have been squeezed by provincial funding cuts and per-student grants that are lower than those for university or high school, said Linda Franklin, president of Colleges Ontario.

“This new restriction on tuition makes it even more difficult for colleges to deliver quality programs to students,” she said.

With an average undergraduate arts and science tuition of about $7,180, Ontario’s university fees are the highest in Canada. While community college fees are not as high compared to other provinces, college students had been asking for a two-year freeze and then a cap at the rate of inflation.

Duguid noted the government also will move to tackle the practice of “flat fees,” in which most community colleges and about half of universities charge full tuition for students whether or not they take a full load — sometimes those taking just 60 per cent of a full load. University students have called this unfair, and Duguid said the government should find an appropriate solution by the fall of 2014.

However, community college students are used to the system and it actually is more affordable than paying the pricier course-by-course cost, said Tyler Epp, of the College Student Alliance.

Duguid also said the government will change payment timelines so students who have to wait for their student loans to come in are not charged such financial penalties for late payment.

“We’re pleased to see the government making progress on deferral fees and flat fees — we’ve been asking for that ,” said Alysha Li, president of the Ontario Undergraduate Student Alliance.

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“But we’re disappointed there isn’t a tuition freeze because tuition has greatly outpaced the rate of inflation.”