TORONTO -- In a move aimed at striking a balance between the needs of students and public post-secondary institutions, the Ontario government announced Thursday it is lowering the cap on average tuition fee increases over the next four years.

But the news didn't appear to satisfy either student advocates or representatives for colleges and universities.

Under a new framework announced by the governing Liberals, annual tuition fee increases will be capped at an average of three per cent. Previously, colleges and universities were allowed to hike tuition by an average of five per cent.

"We've had to arrive at what I call a balanced solution," said Brad Duguid, Minister of Training, Colleges and Universities.

"We want to make sure that while we're reducing the future burden for students when it comes to future tuition increases, we also have to balance that off with ensuring we continue to have a globally competitive post-secondary education system."

Duguid acknowledged the new cap -- which is one percentage point above Ontario's average rate of inflation over the past decade -- will be tough for colleges and universities, which will now be receiving less revenue.

"We're going to work with them to overcome that," he said. "It's a balance between quality and affordability."

The province says the fee system can still be flexible -- with some programs increasing more and some less as long as an institution's tuition increases average three per cent a year overall.

Tuition for professional and graduate university programs and high-demand college programs may be increased by up to five per cent, down from eight per cent previously.

The details didn't impress the Ontario branch of the Canadian Federation of Students, which had presented the province with its own recommendations for a tuition fee framework last month.

"Lowering the cap is ensuring that tuition fees will increase and continue to increase over the next four years," said chairperson Sarah Jayne King, whose group had suggested a 30 per cent tuition fee reduction over the next three years.

"It's very disappointing to see the government not responding to the needs of students and turning their backs on Ontario families in the future."

According to CFS Ontario, which said it represents over 300,000 students province-wide, tuition fees have increased by as much as 71 per cent since 2006.

"Students don't really see this as striking a balance. Striking a balance would be seeing investment in our post secondary education sector. Universities and colleges are calling for increases to make up for funds that they're not getting from the government," said King.

"Simply lowering the amount of increases does not ensure that funding will be adequate to our institutions."

Meanwhile, the Council of Ontario Universities called the government's reduction of allowable tuition fee increases a "challenge."

Saying it acknowledged the province's budget deficit and goal of balancing interests, the COU pointed out that tuition counts for 44 per cent of universities' operating revenue on average.

"While it won't be easy to absorb this reduction to tuition revenue on top of government funding cuts announced in the last provincial budget, Ontario universities will continue to put the needs of students first," said COU char Alastair Summerlee, who is also the president of the University of Guelph.

"Maintaining quality of the learning experience will remain our priority."

Focusing on that quality of education is something the province needs to address while trying to lower ballooning costs, said former professor and Progressive Conservative education critic Rob Leone.

"Tuition has gone up over the last number of years astronomically, at the same time class sizes have gone up and the number of full time professors teaching our students has gone down. We think we have to address that concern," he said.