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Brad Duguid is Ontario’s Minister of Training, Colleges and Universities.FRED LUM/The Globe and Mail

Ontario is going to make it less expensive for students to go to university or college part-time, and easier for those with student loans to pay their tuition.

Training, Colleges and Universities Minister Brad Duguid on Thursday announced a package of changes to the ways postsecondary institutions can charge tuition. The move drew cheers from student leaders but upset universities, many of which will have to make do with less revenue.

Starting in the fall of 2015, part-time students will only pay per-credit, instead of being forced to shell out a flat tuition fee. Initially, any student who takes less than 70 per cent of a full course load will be exempted from paying full tuition; that figure will rise to an 80-per-cent course load in 2016. The province estimates this change will save some students up to $1,700 annually. Students with disabilities will only have to pay per credit, no matter how many courses they are taking.

Those using the Ontario Student Assistance Program will not have to pay their tuition until they have received their loan money. Schools will also be prohibited from requiring tuition payments before the start of August.

All students will also have the option of paying tuition in installments each term, instead of being forced to pay everything at the start of the year. They will not have to pay any extra fees to do this.

Institutions will still be allowed to collect deposits from students, but these will be capped at $500 or 10 per cent of the tuition, whichever is higher.

"My first priority … is to see the postsecondary system through the eyes of the student. The tuition adjustments that we've made today are simply a matter of fairness," Mr. Duguid said at Queen's Park Thursday. "It's not fair for a student who is taking part-time courses to be being charged full-time fees. It's not fair for a student that's awaiting their OSAP payment to be charged late charges because the OSAP arrives later than their tuition's due."

Student groups have long pushed for these changes. In particular, they objected to the fact that many schools demand all tuition fees be paid at the start of the year, even though OSAP is distributed in installments each semester. This meant that many students on OSAP had to pay much of their tuition before their loan money came through, or pay schools an extra fee to defer their tuition payments.

"It's great to see that students who have the highest financial aid will no longer be penalized for essentially not having the money to pay their tuition on an earlier deadline," said Amir Eftekarpour, president of the Ontario Undergraduate Student Alliance. "With the adoption of per-term billing deadlines for tuition, this is a much more fair way for students to pay their tuition."

However, he argued that the per-credit billing system should be brought in more quickly, rather than phased in over the next three years.

These changes will hit already cash-strapped universities that made extra money through deferral fees and by having part-time students pay full freight.

University of Toronto president Meric Gertler said his school will lose $16-million per year once the part-time threshold is raised to 80 per cent – a drop of about 4 per cent of the tuition revenue U of T earns from domestic undergraduate students.

The other tuition changes will cost the university an estimated $3-million annually once they are fully implemented.

Mr. Gertler listed several things – hiring more faculty, sending students overseas, research – that the money paid for.

"Our margins are so slim that it's not clear to us how we are going to continue to be able to finance these important improvements in learning," he said in an interview. "We will do everything we can to maintain them. But it becomes that much harder to support them. And we don't want to lose ground in terms of improvements to undergraduate education, and it is for that reason that this decision is so disappointing."

Mr. Duguid said he understands the program change will cause problems for postsecondary institutions' budgets, but argued that, with education funding increases over the last decade, they should be able to afford it.

The government is not offering extra money to schools to offset the lost revenue from the tuition changes.

"This is an impact, and I don't think it's a fatal impact by any means," Mr. Duguid said. "We're confident that, while there will be an impact on revenues for universities and colleges, that they'll be able to adjust to it."