The assembly has rejected a proposal to stop the county government from giving loans to university students.
Kagaari South MCA Robert Ireri had moved a motion to scrap the loans, and instead have bursaries for the students.
The county government had formed a partnership with the Higher Education Loans Boards (Helb) so that the board would receive money from the county and advance the same to students who applied.
The MCAs termed the students' demand to be given bursaries a ploy to get pocket money from the county government.
The students had planned a protest to demand bursaries just like secondary school and college students.
Mr Ireri argued that the county Helb loans were too expensive and not easily accessible to students.
"Let's suspend the issuance of loans through Helb and have students benefit from bursaries," said Ireri.