The prime minister also told Parliament on Thursday the private university authorities agreed to pay the VAT.
Leader of the Opposition in Parliament Raushon Ershad demanded Hasina’s intervention after sufferings for the protests crippling capital Dhaka.
“The students won’t have to pay the VAT. The university authorities will pay. They have admitted it,” Hasina said.
The prime minister in her speech seemed to be annoyed with the private universities.
“These private universities, several universities in a single building at Dhanmondi, several under one roof at Gulshan, with big names, they talk big. They don’t have accountability,” she said.
There are 83 private universities running in Bangladesh with approval from the University Grants Commission (UGC).
UGC Chairman Professor Abdul Mannan recently expressed dissatisfaction over the private universities.
He also said the UGC could not act against these universities for irregularities since the commission did not have the power.
The students have been protesting since the government imposed 7.5 percent VAT on tuition fee at private universities, and medical and engineering colleges in the budget for 2015-16 fiscal.
They took to the streets in Dhaka on Thursday demanding withdrawal of the VAT and protesting against attack on demonstrators at Rampura on Wednesday.
Traffic at Uttara, Pragati Sarani, Rampura, Mohakhali Wireless Gate, Dhanmondi 27, and Ashulia came to a halt for the demonstration.
In the afternoon, the National Board of Revenue (NBR) in a statement said the university authorities, not the students, would have to pay the VAT.
Some of the students are protesting even after the NBR clarification demanding withdrawal of all sorts of VAT on education.
About higher education in Bangladesh, Prime Minister Hasina said, “Students in no country study at such a cheap rate. You’ll have to understand this.”