Your college can't look at your data because it's stored onto Microsoft's servers. Also, in my case, Microsoft given out One Drive Business and I don't think they would modify the way it works just to give universities the possibility to peak into their students cloud storage. I think you can be as safe as Microsoft is.
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I use https://contabo.de/ but unless you understand ze German I dont zink zey vill do business wiz you.
Their cheap and cheerful VPSs are basically desktop PCs on shelves. No UPS, no Backup. But their CPUs are 3930Ks (surprisingly) so single core performance is not too bad.
But I'd think that there are some decent VPS offers around in the US.