I’ll do my best to answer, based in large part on this excellent interview with a historian who actually wrote about this specific topic. At the start, American college fashion was very similarly formal to, and often copied directly from, that of its European counterparts. In the early 20th century, that began to change, both as young students tried to form a style separate from their parents, and due to quirks of the American university system of the time. Our colleges placed a greater emphasis on physical activity and were often built on much larger campuses than their European peers, requiring more walking to get from place to place. As a result, athletic dress was not only rebellious, it was practical. Now this was still athletic wear appropriate for the upper class, like sports jackets and less structured dresses, but it was an initial step towards casualness.

The next big shift came in the late 40’s and early 50’s, with the explosion of the American middle class in the post-war period. Fueled in part by laws like the GI Bill, which pays tuition for veterans, middle class students rapidly became a majority in universities, which had previously been the domain of the upper class. These middle class students brought their fashion sense with them: practical, casual, and affordable. This combined with the existing sporty college fashion culture to create a style that was intentionally laid back. Building on the, the counterculture movements of the 60’s and 70’s (like the hippies) were most prominent on college campuses, influencing fashion with their intentional rejection of formality.

Adding my own thoughts now, it’s also important to consider how taboo class is in American culture. Broadly speaking, American culture values economic success, but despises nepotism and hereditary class. Dressing formally when you don’t need to in the US can give the impression you’re trying to broadcast being high class, or worse yet trying to imply you’re better than your peers due to your class. In most situations, us Americans tend to default to dressing casually when able to, as opposed to dressing up when it may be required. This is heavily connected to the rise of athleisure fashion in the US, which has deep historic roots way too complicated to get into here (although I highly recommend the Articles of Interest podcast, which just did a whole season on the topic). When combined, this has led to collegiate fashion norms that emphasize looking casual and unbothered over dressing up.