Glasgow Caledonian University had its licence to sponsor students under Tier 4 of the points-based visa system suspended for three weeks while the UKBA investigated claims that students from the Philippines enrolled on a nursing degree were working full time.
Last week, the licence was reinstated, and the university said there had been "confusion" over how teaching had to be delivered to meet visa requirements.
However, Pamela Gillies, the vice-chancellor, expressed her anger at the immigration agency's approach, accusing it of damaging Glasgow Caledonian's reputation overseas.
"It has been a particularly painful process for us that we would not wish any other university to have to go through," Professor Gillies told Times Higher Education.
"When we received the suspension, we were considerably surprised. We felt it was disproportionate, and we haven't changed our mind on that. The press coverage has really dented our reputation, and we have to think about how we will proceed. We did have concerns about the way it's been handled, and we're taking (legal) counsel on this."
The university has said it is no longer working with its international recruitment partner for nursing, ISA 4U Ltd, which is understood to be facing investigation by the UKBA.
Professor Gillies said the university would cooperate fully with this investigation. The UKBA declined to comment on the case.
Despite misgivings about the handling of the case, Professor Gillies said she was confident that the university's reputation could be restored.
"We have a tremendous commitment from our staff and students, and we will be going forward with our international programme of development," she said. "We will be doing everything to recover that reputation and to continue to thrive."