Thousands of students have been mistakenly told that they have no university place this autumn - just as they were preparing to sit their A levels.
The Universities and Colleges Admissions Service said it had rejected 9,000 students because it assumed they had not returned the necessary forms when in fact they had been delivered to the wrong address.
Worried students at City and Islington College sixth-form centre in London approached their higher education adviser, John Beckett.
He said: "With one student, this paralysed him and he didn't know what to do. The amount of panic and stress this put students through just as they were coming up to their A2 exams was unacceptable. I would hope that it did not have an effect, but the timing - getting the letter just before the exams - was not what they wanted."
The college has written to Ucas expressing concern and asking for reassurance that the problem will not recur.
Under normal Ucas procedures, all applicants who had not communicated their firm and insurance choices by the May 15 deadline were rejected automatically. Administrators were alerted to the problem when this generated twice the normal number of rejection letters.
Anthony McClaran, acting chief executive of Ucas, told The THES that institutions have said that they will be sympathetic to students and will reinstate their offers. He said the mix-up was caused by a number of factors. "The first is that there has been a problem with the mail. A large number of letters have been misdelivered to another business in Gloucestershire.
"Second, we dropped this year a reminder letter to students. In the past, it had caused huge problems as it crossed with their acceptances in the post. Clearly, in the light of this, we need to look at whether it needs to be reinstated."
He promised that no one affected would be put at a disadvantage. "At the end of this, there won't be any students who will be affected," he said.
Mr McClaran said that any applicant who had received the rejection letter had ten days in which to respond. Some 6,000 of the 18,000 students who received a letter have contacted Ucas to communicate their choices.
Two students at Bede Sixth Form College in Teesside were affected. A spokeswoman said: "One girl was quite concerned as it came out of the blue.
She had put the slip in and sent it off in good time, so to get a letter saying she had been declined a place at university by default was a shock."
Between 15 and 20 students at Queen Elizabeth Sixth Form College in Darlington were hit. One of the students had sent her paperwork by recorded delivery but Ucas did not receive it. Staff at the college have asked Ucas to reinstate the students who had been rejected but have not received a reply.
Other sixth-form tutors blamed students for not completing the process correctly. One said she felt guilty after dismissing two students who approached her with rejection letters. Students were told by Ucas they would have to apply through Ucas Extra or enter clearing once they had received their A-level results.
Liberal Democrat education spokesman Phil Willis has demanded an inquiry.
He has tabled a written parliamentary question to education secretary Charles Clarke on the scale of the problem and the steps being taken to resolve it.
A spokeswoman for the Royal Mail said a full investigation was under way.
But, she said, initial findings suggested only 200 application forms had been delayed.