VPN is short for Virtual Private Network. A VPN tunnel is an encrypted connection between two places at an open network.
If you would connect to the university network without a VPN tunnel, the ISP (Internet Service Provider) you use, would see that there is data sent between your computer and the university network. The ISP would also be able to see the data that is sent and possibly intercept data.
When you connect to the university via VPN, an encrypted tunnel is created from your computer to the university VPN server. The ISP can still see that there is data sent from your computer to the university network, but they can't see the data and they can't intercept any data.