University of Alberta Provost Carl Amrhein speaks to reporters Friday after the approval of the 2010-11 budget. (CBC)

Students at the University of Alberta will pay a mandatory $290 annual fee on top of their tuition starting in September.

The fee is included in the university's $1.6 billion 2010-11 budget, approved Friday by the board of governors.

The levy was originally proposed at $550, but was lowered in response to concerns from student organizations, said Provost Carl Amrhein.

"We think it's a balanced approach to maintain the quality of the institution and the opportunities for the students and yet still deal with the very legitimate student concerns about access to the institution," he said.

The levy — known as the Common Student Space, Sustainability and Services (CoSSS) fee — has been approved for the next two years, and will be reviewed each year after that.

"We're happy to see that the fee has been lowered. That's something that we've been pushing for", said Zach Fentiman, president of the students' union. "But it still represents a significant concern."

Expenses cut $30 million

The university faced a $59 million shortfall when it began the budget process. The board of governors cut expenses by $30 million or five per cent, which means layoffs will occur, though the number of jobs to be cut or left vacant isn't yet known.

The university will save another $10 million through what the school calls administrative efficiencies.

The university is also awaiting government approval to raise tuition fees for some graduate and professional programs. The so-called market modifiers — which would compare tuitions at the U of A with other universities — could raise tuitions in some professional faculties dramatically, said Fentiman.

"We've seen increases to tuition levels in a broad array of programs,' he said. "Those increases range from 20 to 66 per cent, depending on the program."

University student Laine Rogers says the $290 fee should not be levied at all. (CBC)While the proposal still requires provincial approval, the budget released Friday includes $4.3 million in revenue from market modifiers for 2010-11.

Nonetheless, the university will still have a $14.7 million deficit in its operating budget.

The drop in the mandatory fee is "better, but it's not enough," said Laine Rogers, a student in the Environmental Sciences program. " I don't think we should have the fee to begin with."

"You work all summer as hard as you can to be broke for eight months, so $290 is a big deal," he said.