Staff of the former Luton College of Higher Education, which changed its name in July, were forced to seek emergency housing for its students after far more turned up than expected.
About 200 are in four-star hotels and the rest are being taken by bus each night to accommodation belonging to the American University at Watford.
Roy Cox, a parent from Devon, described the scene last Sunday when he arrived in Luton with his daughter as 'bedlam', with hundreds of students and parents demanding to know why they had been promised accommodation that was not available.
He said he was consulting a solicitor after he and his daughter, Natalie, 19, spent six hours waiting to hear whether she had anywhere to stay that night.
Natalie had paid pounds 100 deposit for accommodation but was informed three days before she left home that, contrary to earlier assurances, none was available. On Sunday night she was sent to a hotel that was full and then to another that could only take her for one night.
On Monday she was taken to the American University where the authorities say that she can stay until Friday.
Mr Cox said: 'I have never seen anything so disorganised. If they had told us in advance that this was going to happen, we would have gone up there and sorted something out.'
The vice-chancellor, Tony Wood, said that some parents had complained. He said that the university was the victim of its own success because it had 400 more students than the 4,000 expected.
As a higher education college, Luton always offered more places than it needed to fill its courses, because students often accepted but then received a better offer from a university, he said. This year Luton became a university too, and as a result fewer applicants dropped out.
Some other universities have also provided emergency accommodation for new arrivals. In Manchester about 200 students are in hotels or makeshift dormitories. At the University of Central Lancashire in Preston about 100 students are spending the week at Pontin's in Southport.