The provincial government announced a three-year memorandum of understanding with university presidents Thursday that many said will see already high tuition fees rise further and the quality of education suffer.
"Students are going to be paying more and they're going to be getting less," said Rebecca Rose of the Canadian Federation of Students.
"It means that it's going to be harder for families to send their children to post-secondary education and once they get there, the quality's going to be diminished."
Marilyn More, the minister of advanced education, said the province's 11 universities will get a grant of $324 million for 2012-13 — three per cent less than they received for this academic year.
The minister said the cut, following a four-per-cent reduction in the previous year, was necessary as the government searches for ways to cut spending.
She acknowledged that it may be hard for universities to adjust to successive cuts, but said the days of substantial increases were over.
"We're not asking universities to do anything different than we're asking school boards and hospitals and district health authorities," she said.
"We cannot afford the growth in costs of providing the programs and services that we've had in the past."
The Opposition immediately slammed the NDP government for cutting university funding after recently announcing a $50-million package to keep the Bowater Mersey paper mill near Liverpool open. They also pointed to a $14-million deal to keep forestry operations viable after the shutdown of the NewPage paper mill in Port Hawkesbury.
Liberal Leader Stephen McNeil said the memorandum of understanding lacked any long-term planning for university spending and leaves a lot of uncertainty over tuition hikes in the next few years.
"This report has done nothing in my view but drive up tuition and actually put in jeopardy the kind of quality (education) we're going to be able to present to the next generation of young Nova Scotians," he said.
Medical, dentistry, law or international students could see their tuitions go up higher than three per cent since the cap doesn't apply to them. Students from other provinces could also see their fees go up if a limit on their tuition is removed.
According to Statistics Canada, average undergraduate tuition fees in the province are $5,731, making them some of the highest in the country.
Peter Halpin of the Council of Nova Scotia University Presidents said institutions will be looking closely at tuitions and other auxiliary fees as they adjust to reduced grants.
He said that could result in fee hikes, poorer quality education and larger class sizes.
"Something has to give somewhere and we're deeply concerned it's going to be on the quality front," he said.
Halpin said the three per cent cut for 2012-13 will result in a $33-million overall funding reduction when inflationary costs are factored in.
The previous four-per-cent cut amounted to a reduction of $42 million, he said.
The province is also offering $25 million over three years to encourage universities to come up with ways to cut costs.