Southampton Solent University has launched legal action after some of its distance learning students were asked to repay maintenance loans putting them at "financial risk".
Students on weekend courses at Solent are among those who have been told to repay loans and grants that the Student Loan Company (SLC) has now said they were not entitled to receive.
The SLC has written to approximately 22,000 students across several universities telling them they were given loans in error, and to give the money back.
The Department for Education (DfE) higher education providers incorrectly categorised distance learning courses.
A Solent University spokesperson says that those affected are on weekend courses run in partnership with QA Higher Education, which teaches programmes like computer science and business management in London, Birmingham and Manchester.
The university, along with others, is now starting legal action against SLC and DfE.
The spokesman added: "Southampton Solent University was not aware of this issue prior to the communication from the DfE, and we are extremely concerned that maintenance loan payments to a number of our students have been abruptly blocked, putting them at risk of financial hardship."
The spokesperson says the university is working with its partners and has begun legal proceedings and declined to comment further while this is ongoing.
When asked, the university said it could not provide the number of its students who are affected, but said that it is supporting any students who want to transfer to weekday or daytime learning courses if they wish.
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A spokesperson for Solent Students’ Union says they are working with the university and partners to support those affected and is calling on the government to reconsider its position.
An SLC spokesperson said it understands students may be concerned, it needs to ensure public money is used as set out in its regulations.
A spokesperson for the SLC said: "(The) Department for Education has made clear to higher education providers it is their responsibility to support the students and provide financial hardship support.
"Following the courses being correctly classified and students being advised of their reassessed entitlement, customers will be able to make arrangements with SLC to ensure they are supported through this process, including affordable repayment plans being put in place where appropriate.”
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