"The idea that people experiencing mental illness need to 'harden up' is unfortunately a common misconception, but it is very unhelpful," chief executive Judi Clements said.
"People in distress deserve our compassion and understanding, not our judgment."
The New Zealand Union of Students' Associations said it had received "multiple reports" of Mr Seymour's comments.
The Act leader's "dismissive approach" was out of step with evidence of mental health issues among the student-age population, national student president Rory McCourt said.
There had been a "near-universal rise" in the number of students seeking counselling services at New Zealand universities since 2009.
"We're disappointed Mr Seymour has taken this approach despite the evidence. The data suggests this is a growing problem," Mr McCourt said.
"How bad does it have to get for politicians to take the deteriorating mental health of our students seriously?"
He suggested Mr Seymour spend some time on campus with students "and ask them about the impact of rising rents, longer working hours, and unsustainable academic pressure on their studies and mental health."
Mr Seymour was one of several MPs speaking to a student forum at Weir House on Monday night.
Sophie Wynne, a first-year politics and law student, contacted the Herald to say she was appalled by Mr Seymour's answer. She approached him afterwards to clarify what he meant.
"His basic response to me was someone not choosing to be happy is not making the most of life," she said. "I asked him if he would ask someone with depression on a bad day to harden up and he said he would."
Mr Seymour denied he made those comments, "but I actually said you did have to choose sometimes how you are going to feel about something, which I think is true. But I did not say if you have a mental illness, you have chosen it."
Where to get help:
• Lifeline: 0800 543 354 (available 24/7)
• Suicide Crisis Helpline: 0508 828 865 (0508 TAUTOKO) (available 24/7)
• Youth services: (06) 3555 906
• Youthline: 0800 376 633
• Kidsline: 0800 543 754 (4pm to 6pm weekdays)
• Whatsup: 0800 942 8787 (1pm to 11pm)
• The Word
• Depression helpline: 0800 111 757 (available 24/7)
• Rainbow Youth: (09) 376 4155
• CASPER Suicide Prevention
If it is an emergency and you feel like you or someone else is at risk, call 111.