UPDATE: Police gave the disperse order to the crowd inside the capitol around 6:30 p.m. and started making arrests about an hour later. NBC Bay Area's Jodi Hernandez said students from UC Berkeley, Cal State East Bay and Cal State Monterey Bay were among those being arrested. The processing was loud but peaceful, according to those on the scene.
There was a heavy police presence both inside and around the Capitol building in Sacramento Monday.
A CHP helicopter flew overhead and dozens of police officers in full riot gear stood in a line.
On the other side of the line was thousands of protesters waving signs and chanting, "They say cut back, we say fight back.''
"We were expecting to have a good future, but things are looking uncertain for a lot of families,'' said Alison Her, 19, a nursing student at California State University, Fresno. "I'm the oldest in my family and I want my siblings to be able to go to college, too.''
Organizers had hoped that 10,000 protesters would demonstrate against rising tuition rates and demand that state lawmakers restore funding for higher education. But the actual turnout fell short.
After the rally, hundreds of students lined up to enter the Capitol and filled conference rooms and hallways inside. Some met with lawmakers to lobby for increased funding for higher education, while others headed for the rotunda.
California Highway Patrol officers allowed several hundred students to settle on the black and white marble floor of the rotunda before all four hallway entrances to the area were blocked. Another hundred students sat down in a hallway, communicating with fellow protesters by call and response.
They were told they would have to leave at closing time which was 6 p.m., but they vowed to stay.
Gov. Jerry Brown said in a statement that the protest highlights the need for California voters to approve a tax increase he has proposed for the November ballot.
"The students today are reflecting the frustrations of millions of Californians who have seen their public schools and universities eroded year after year,'' Brown, a Democrat, said in a written statement. "That's why it's imperative that we get more tax revenue this November.''
Buses brought hundreds of students in from as far away as the University of California, Riverside, 450 miles south of Sacramento, for Monday's march.
Despite participation from outside groups, including Occupy movement protesters and supporters of the millionaire's tax, student organizers tried to keep the focus on education cuts that have led to steep tuition increases, restricted enrollment and fewer classes and student services at California's public colleges and universities.
Tuition has nearly doubled in the past five years, to $13,000 for resident undergraduates at University of California schools and to $6,400 at California State University schools. Community college fees are set to rise to $46 per unit by this summer, up from $20 per unit in 2007.