Students alleged that the management of the PSG College of Technology had increased the rent for ordinary hostel room to Rs 19,000, putting an additional burden of rs 5,000 on a student.
Shouting slogans against the management, the students also allegedly ransacked the hostel warden's room last night.
Senior police officials, including city police commissioner, Amaresh Pujari, rushed to the spot to bring the situation under control.
College sources said the management and students held negotiations and the proposed hike was withdrawn late last night.
About 100 policemen, deployed in the hostel premises, were withdrawn following the decision, police said, adding, no complaints had been lodged.