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Students on U of T campus Oct 13, 2010.Moe Doiron/The Globe and Mail

Ontario's university and college students can expect to pay 5 per cent more once again this fall, as the provincial cap on tuition fees has been maintained and extended for one more year.

The decision comes in a statement released Thursday morning by Glen Murray, Minister of Training, Colleges and Universities, which also rejects a media report that the McGuinty government was considering setting standard tuition fees for all arts and science students in the province.

Students and university administrators have eagerly awaited word on future plans for the province's tuition policy, which was set to expire at the end of the month and has permitted 5-per-cent average increases in fees in each of the last two years.

Last month, economist Don Drummond recommended that Ontario continue to allow 5 per cent annual rises, but giving universities greater flexibility to adjust individual program fees under the overall cap. The increase will provide universities with extra revenue at a time when the government is widely expected to constrain funding increases to 1.5 per cent annually – an amount that most say will hardly cover the continued growth of the system.

Several university presidents had hoped for a longer-term tuition framework that would provide greater certainty with which to budget for future years.

Mr. Murray also confirmed he will not heed Mr. Drummond's call to revisit Ontario's new tuition grants, a signature promise from the last election campaign that makes many university and college students eligible for grants of $1,600 and $730 respectively – about 30 per cent of the current average undergraduate arts and science fees.

"The province will continue to provide a 30 per cent rebate on tuition for college and university students for many families," Mr. Murray said in the statement. "Ontario continues to have one of the most generous student aid packages in the country. It's our plan to eliminate the deficit while protecting education."

The idea of setting a standard tuition fee at all provincial universities – which would likely have meant schools with higher fees losing revenue while those with lower costs would take in more – has been raised in government circles, but was not believed to be close to implementation, sources said.

Ontario already has the highest average undergraduate tuition fees of any province at more than $6,300 per year, according to Statistics Canada.