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Late Thursday night, sources told NY1 that the Metropolitan Transportation Authority would scrap its plan to phase out the free student rides, which was originally proposed to help close the agency's $800 million budget gap.

The MTA said the city held its contribution steady at $45 million, while the state will restore $25 million in funding. The MTA is contributing another $45 million towards the program as well.

The initial proposed cuts sparked a series of protests from parents, students and elected officials, and MTA officials admitted that charging students for MetroCards could affect the ability to get a quality education.

MTA officials said in a statement, "The MTA has decided to abandon the proposal to charge students for travel to and from school. As a result, the budget deficit that we are facing will increase, but the alternative is worse."

While appearing on John Gambling's radio show on WOR 710 Friday, Mayor Michael Bloomberg said that he did not know whether the dispute over the MetroCard funds were a deliberate political game.

"Maybe they took it out, hoping they wouldn't have to put it back, but knowing deep down inside that if they had to, they had to," said the mayor. "The political reality is, we're back to the same [MTA budget situation]."

Many New Yorkers in Fort Greene, Brooklyn told NY1 Friday morning that they were relieved to learn the students would still receive free MetroCards.

"When they saw how mad people were getting and how it would affect them, I think they saw it was a mistake," said student Abdel Mustafa.

"You feel like a huge achievement, like a total accomplishment, definitely," said a local student. "Being a freshman in my first year, I would like to go to the same school."

"This is very good news to everybody, because the younger kids that are going to high school now, next year, they'll have a way to get to high school and won't have an excuse not to get to class," said another student.

"We might have had to send him to a local school, and that would negatively impact his chances in the future for a better education," said parent Manuel Joachim. "So it's really fantastic that the program has been saved."

MTA officials said further actions are needed to close the budget gap in their financial plan, which will be released in July.