The most likely reason why this happens is that the system truncates passwords. To check this hypothesis, you could try to change your password to something longer and see what happens: does the system recognize "thisquitelongpassword" as "thisquitelong"? If so, the system definitely truncates passwords. If not, there may be serious issues with input validation, as highlighted by @Matthew.
While password truncation may be necessary to interact with legacy systems - which also truncate usernames, see this answer on Serverfault - in general it should be avoided, as it reduces the "password space", i.e. the number of unique passwords that can be generated.
Attackers can save a lot of resources (time,money) if they know that their target system uses truncated passwords, since they know they don't need to try passwords longer than the truncation length.
While your behavior doesn't seem malicious to me, some organizations are very sensitive about people finding flaws in their systems.
Therefore, you might try to tell your university about this, but don't stress too much your knowledge of possible attacks. Just saying something like "I read this can be sign of a security issue" should be fine. Also, don't state things in an absolute way like "this is completely unreasonable", as there may be reasons for that (for password truncation, not wrong input validation).
Obviously, don't perform too many tests, don't automate the tests, and don't carry out attacks.