The Newfoundland and Labrador government has delivered a cash cut to Memorial University's core operations, although two ministers said Thursday they "expect" the long-running tuition fee freeze to continue at the province's only university.

Advanced Education and Skills Minister Gerry Byrne said he feels that a tuition offset program, which was increased this year, should be enough for the university to avoid the first fee hike in well over a decade. 

"We feel that Memorial University of Newfoundland does indeed have the capacity to be able to maintain the tuition freeze," Byrne told reporters Thursday. 

In response to the provincial budget, Memorial President Gary Kachanoski said the university will take the government's suggestion to maintain the freeze to heart.

The tuition offset has increased, but the Liberals took millions out of the university's operational line as part of a bad-news budget delivered at Confederation Building in St. John's. 

Budget Bennett 2016 2

Finance Minister Cathy Bennett told reporters that she expects Memorial University to make the best choice for students. (CBC)

About $8 million has been taken out of Memorial's operational grant, and the government expects to save $18 million from the grant each year in the future.

The ultimate decision to raise tuition fees lies with the university's administration. But in former budgets, the government has specified that the freeze shall continue.

Finance Minister Cathy Bennett refused to categorically insist that MUN's tuition fees will stay frozen.

"MUN is accountable, and has the autonomy, and has always had the autonomy to do things they need to do," she said. 

"We expect that because we're providing them with continuation of the tuition money.... they will make their decisions in the best interest of the students," Bennett told reporters. 

Kachanoski told CBC's On the Go that while the university does have the ability to raise tuition on its own, Memorial needs to be "aligned" with the government's decisions — suggesting the freeze would continue.

"If they've given us allocations, [we have to] take into account those allocations that they've given to us and be fair with that," he said.

According to Kachanoski, MUN is still picking through the budget documents to see what all the changes will mean to the university's bottom line.

Loans are back

MUN's tuition fees are among the lowest in the country.

Charlene Johnson NL finance minister budget speech CBC

Former Tory cabinet minister Charlene Johnson announced in 2014 that student loans would be replaced with grants. Loans are back in the 2016 budget. (CBC)

The Liberals had pledged to continue the tuition freeze as part of their election campaign.

That was before they took the reins of government, and learned that last year's deficit ballooned to $2.2 billion.

Tax increases were announced across the board on Thursday as the Liberals try to chart a path back to a balanced budget, a process government says will take five years to complete. 

Students at Memorial will be hit as well.

As part of new changes, the government is re-introducing loans to its student financial assistance programs.

Loans were eliminated in April 2014, when the government transformed all student aid into grants that did not have to be repaid.

Now, loans are back. About $40 of the weekly student payments will need to be repaid.

 The government has also eliminated grant payments to Newfoundland residents who decide to study outside the province, if there's the same program available inside.

"When we think about how we support the finances of students, we can't support grants outside the province," said Bennett.

She said the move to cut those grants was motivated by a desire to have students stay in the province.

"We feel it's important that those young people, who are very important to the future of our province — we would love to have them stay and live and work here."