The Nova Scotia government will allow tuition fees to rise by three per cent a year while reducing its grant to universities.
The government announced a new three-year memorandum of understanding today with university presidents.
Marilyn More, the minister of advanced education, says the province's 11 universities will get a grant of $324-million for 2012-13.
That's three per cent less than the previous operating grant.
The agreement also includes a $25-million fund to encourage universities to find ways to cut costs.
The Alliance of Nova Scotia Students Associations panned the deal, saying it will hurt the quality of education.