Hundreds of students are facing hardship after the second instalment of their loans failed to appear in their bank accounts.
The error occurred as many were taking exams. It has caused family anxiety and rifts as letters were sent to the students' homes stating that they had dropped out.
University staff have criticised the Student Loans Company for failing to keep them fully informed about the situation.
At the University of North London, about 50 students have complained to staff about the non-payment. Others are thought to have approached the Student Loans Company directly.
A member of staff who deals with student loans, but who declined to be identified, said: "It's pretty severe, even when a small number of students are affected. We shall see some hardship cases coming out of this. Our main concern is to make sure the students are not stressed during their exams."
"I sent an email, but we haven't had any response from the Student Loans Company," he added.
Pauline Walmsley, who deals with student loans at the University of Central Lancashire, said: "Students were sent letters to their home address saying that they had withdrawn and some of their parents thought they had withdrawn.
"It has been upsetting and has caused a lot of work for us."
At the University of Liverpool, students faced additional problems as large direct debits were due. Gary Walker, who deals with student loans at the university, said: "The ordinary Bacs instalments were paid late, and this caused us some problems because students had signed forms allowing the university to collect residency fees from their bank accounts."
He said the SLC had not informed them that there had been a delay, so the university had attempted to collect the money before the loans had come in. "One of the repercussions is that students have blamed the university for this," he added.
The SLC refused to say how many students had been affected. It called it "a small number" and gave no reason for the mistake.
An SLC spokesman said: "The cause was quickly identified and payments were made immediately.
"The SLC worked throughout last weekend to identify any other students who could be involved and action was taken to ensure that these students were also paid."
He said that loans staff at universities and colleges who had contacted the SLC were kept "fully appraised" of the situation. The claim was strongly contested by those who spoke to The THES .