Is this possible? I'd like to pull from a master list of universities and colleges either maintained locally in sharepoint or somewhere online (I found this). The idea is to keep users from typing in all sorts of variations of schools (i.e. UMASS vs University of Massachusetts).
I'd actually suggest using Managed Metadata Services for this.
The reason being, you want to include synonyms on your list (UMASS vs University of Massachusetts). Well, MMS fully supports this. You just create a term set with a list of all the universities, set up the synonyms for all the ones you want, and add Managed Metadata fields in the web sites where ever you need it. All you need to do is to set the MM Field to be restricted just to the universities term set.
This works across site collections (whereas lookups are tightly restricted to a single Web, can't go to subwebs or parent webs), and you can delegate management of the term set to users through the security settings available.
The downside, is that this is only available in SharePoint 2010 Server and up.
What you are looking for is called a lookup column: