Just gonna swoop I here, was looking for leak impressions but...Universities conduct research/teach and colleges just teach, that's the difference.
Actually, Universities are made up of multiple colleges (aka divisions) within the University, each with their own separate funding and hierarchies. College is just a single institution. Both can participate in research. The fundamental difference is the structure. For example, a degree in Computer Science from Old Dominion University is governed by their College of Sciences.
That said, the idea that an NPC who says they "went to University" in the European manner breaks immersion is profoundly ridiculous. Chicago is a multi-ethnic city. The NPC could very well be from Europe and attended college in the United States. If anything, the sheer diversity of conversations in the game
create immersion (although some of the hacked ones are creepy as hell, such as the one I just listened to where a guy tried to explain how they squeeze gel into fake boobs).
Edit 2: Speaking of pet peeves, the only one I have with this game right now is the lack of a goddamn taser. Kneecapping enemies to "neutralize" them when I don't feel like running to catch them seems more anarchist than vigilante and brandishing a gun, generally, has the chance to end poorly.