The 19-year-old said the university intimidated applicants from state school, with its formal settings, where public school students would “flourish”.
She studied at Brockenhurst College, which is not private, and applied to Magdalen College to read law (jurisprudence).
Nowell wrote a parody of a standard university rejection letter before she had heard the university’s decision on whether it would offer her a place.
She wrote: “I have now considered your establishment as a place to read Law (jurisprudence).
“I very much regret to inform you that I will be withdrawing my application.
“I realise you may be disappointed by this decision, but you were in competition with many fantastic universities and following your interview I am afraid you do not quite meet the standard of the universities I will be considering.”
She continues: “While you may believe your decision to hold interviews in grand formal settings is inspiring, it allows public school applicants to flourish and intimidates state school applicants, distorting the academic potential of both.”
Nowell has since said that she sent the email “to prove to a couple of my friends that Oxbridge did not need to be held in awe”.
Thousands of people have shown their support on Twitter and Facebook, for her statement against what she called a “symbol of unfairness”.
Nowell was rejected by Cambridge University last year.
A spokeswoman for the university said the letter was “a witty way to communicate her withdrawal”.
“The irony is, though, that six out of the seven people offered law places at Magdalen were state-educated.”