At least 100,000 young people gathered in central Santiago in a largely peaceful protest. They were backed by workers' unions, parents and other groups sympathetic to their plea for reforms.
Student representatives said the state education system left room for profiteering on a scale that was financially crushing for the students and their families. Student protests have frequently paralyzed parts of urban Chile for the past three months and also led to clashes, arrests and injuries among demonstrators and police.
Controversy flared after a congressional meeting ended with government officials criticizing and defending police action in turns. Opposition legislators accused the government ministers of sanctioning harsh tactics by the police that in some cases incited students to violence.
Protesters blamed institutions corrupted during the dictatorship of Gen. Augusto Pinochet for many of the problems faced by students.
Private institutions sprung up over the past few years charge exorbitant fees, forcing students into debt. The protesters are demanding reforms that will restore a state-funded education system, currently fragmented and decentralized in ways that lead to class-based tiers in quality of education.
Protesters cited huge income disparities despite Chile's high economic growth rate -- forecast at 6.6 percent this year. The average Chilean's annual earnings of $10,080 aren't enough to pay for annual fees of more than $6,000 per year, protesters said. As a result students and parents end up steeped in debt with loans obtained at punishingly high interest rates.
"Interest rates for university students in this country are usurious," said Mario Ruiz of the union of Banco de Chile employees, who are on strike to demand better wages, Santiago Times reported.
"The banking sector in this country has a 27 percent return on equity," Ruiz said. "When this happens in European countries, the authorities intervene. Here in contrast the banks are congratulated in Congress. As it stands right now, 70 percent of the country needs free access to education because their salaries are simply not high enough to pay for it," he added.
Students also received support from teacher groups and unions of other workers.
Meanwhile, state prosecutors have also gone on strike, complaining of heavy workload and poor pay.
"The workload is simply too large," National Prosecutor Sabas Chahuan said. "The system hasn't collapsed due to the sacrifices of the prosecutors and civil servants."