It's probably a fungus, common enough on seedlings. It's called damping off.
Carol

Carol is right, you have fungus and it can easily kill your miniscule seedlings. You need sterile mix for seedlings - you can basically nuke the wetted soil yourself - or I heard good stuff about using Jiffy pellets. You wet them, crumble - and sprinkle seeds on the surface. these pellets are sterile.

Irina

Hi guys,thanks for your help! Just one more quick question, is it okay to put a light dusting of cinnamon to help with damp off or will that keep the seeds from germinating? Angela

Should be OK.

Another option - if you use Physan-20 - it is a good anti-damping agent as well. If you do not use it - it is a stuff we add to our water to keep algae from running rampant on mats.

Irina