Northumbria University says 770 students have tested positive for coronavirus.
Just 78 of them were displaying symptoms, a spokesperson said, and all those affected are self-isolating.
Flatmates and any close contacts are also going into quarantine and have been advised to book a test if they develop symptoms, the spokesperson added.
A public health source has suggested the figures may need to be reconsidered, however.
They told Sky News: “They (the university) are reporting more cases than the whole of the district of Newcastle.
“We wonder if they are counting all isolating students – including contacts – rather than cases.
“The local public health team is investigating. The university only gets self-reported data, after all.”
Ellie Burgoyne, 19, a first-year social sciences student, said at least 20 flats in her halls of residence were isolating.
She too is quarantining after one of her flatmates tested positive a week ago and it “isn’t the most fun”, she said.
A member of staff, who wished to remain anonymous, said there were “high anxiety levels” about “face-to-face teaching”.
Another staff member – a lecturer – said the number of positive tests was “terrifying”.
The university said it was supporting those affected by providing food and other essential items, such as laundry and cleaning materials.
It is also offering “welfare support including 24/7 online mental health support and one-to-one support from our wellbeing teams”.
And it is “working together with our students’ union, the City Council and other partners”.
But it warned students who break coronavirus rules would be “subject to fines from police and disciplinary action by the universities (it and Newcastle University), which may include fines, final warnings or expulsion”.
Students now confined to their accommodation will continue to learn remotely with “additional academic support in place to make sure they are not being disadvantaged” if they miss some face-to-face tuition.
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More than 50 UK universities have confirmed cases of coronavirus as students return to campus, according to analysis from the PA news agency.
Jo Grady, general secretary of the University and College Union, said the “university sector and the government must address this public health crisis immediately”.
Northumbria said it had “Covid Response Teams on call that are working closely with NHS Test and Trace” and local officials.
Students are also being encouraged to download the NHS COVID-19 app.
Councillor Irim Ali, a cabinet member on Newcastle City Council, said the city and university had gone to “incredible lengths” to create COVID-secure environments for students but “sadly, a small number of students are undermining these efforts”.
She added: “If we are to beat the virus, we need a collective effort.”
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Analysis: Fears student infections may spill over into community
By Rowland Manthorpe, technology correspondent
This big outbreak will raise further questions about the wisdom of reopening universities and colleges, not least because the risk of doing so was identified well in advance by the government’s scientific advisors.
Minutes from the Scientific Advisory Group for Emergencies (SAGE) meeting of 1 September, released today, warn that opening further and higher education “has the potential to drive outbreaks”.
Young people are much less likely to have severe coronavirus, but SAGE warns that transmission within universities and colleges may “spill over into the community”.
The movements of students, the scientists say, means “the risk may be national”.
But even though we have already seen outbreaks across universities, the biggest risk may yet be to come.
SAGE says larger outbreaks might leak into the community “towards the end of the academic term, coinciding with the Christmas and New Year period, when students return home”.
Managing that will need, they note, “national oversight, monitoring and decision-making”.
The decision has been made and students have gone to university.
But it’s not at all clear how they will be able to leave.