can one answer their own question here? since I found the solution. If not, I can delete this answer and add this as comment or something. Do not know the rules here.
I just do not know why it happened. But doing this command fixed it
userpath(path)
and now it works
whichinput
built-in (C:\Program Files (x86)\MATLAB\R2012a Student\toolbox\matlab\lang\input)
something cleared userpath somehow. I do not know how this happened. But I am happy now, Matlab is ok.