Thousands of students on Tuesday marched through Rome as part of nationwide protests against university budget cuts.
Organisers said 50,000 streamed through the capital and more than 400,000 thousand rallied throughout Italy.
But they failed to persuade lawmakers, who voted to slash education spending by nine billion euros.
The students argue that policy will starve Italy’s university system of much-needed funding.
The reform bill now goes to the Senate, possibly as early as next week.
Under the government’s proposal, 130,000 jobs will go from the education sector by 2013.
Universities would also be given more freedom to hire managers from the private sector.