A reduction of more than $200 has been made to the University of Alberta's proposed mandatory fee for students. The amount is now $290 per year, down from the originally proposed fee of $550.

The reduction was announced by U of A Provost Carl Amrhein Friday morning at a board of governors meeting. The board is in talks for the university's 2010/11 budget.

The university is asking for the fee to be approved for two years, and looking to the board to consider an additional two years to impose the fee if the province doesn't bump up funding in the future.

Alberta has put a 1.5 per cent cap on tuition boosts, so the university approved a budget that would hit every student with the $290 flat fee. Some faculties such as medicine, law, and engineering could see something called market modifiers, which are tuition increases meant to reflect the salaries those students could one day learn.

"We think it is a balanced approach to maintain the quality of the institution and the opportunities of the students," said Amrhein.

The university's students' union says the budget will pose some problems for students.

"The University of Alberta passed a budget today that represents some serious challenges for students moving forward," said Zach Fentiman, University of Alberta Students' Union president.

The budget still has to be approved by the province, but the minister of advanced education says the mandatory fee could stay. And the market modifiers could increase tuition for some professional programs by 60 per cent.

"At this point in time there is no approval on any market modifiers so for them to put it in to a budget would be a little premature," said Minister of Advanced Education Doug Horner.

Last week, post-secondary students joined forces to send a message to the province to put an end to budget cuts and tuition hikes at colleges and universities.

"I'm personally concerned about having so much debt that I don't even know how to repay it anymore," said medical student Kate Slivko.

And even with the increases, the university is expecting roughly a $15 million shortfall in its operating budget. The administration says by 2012, they hope the university's financial picture looks better.

With files from Deb Shiry