It depends of if webcam recording is triggered by you or the University. I guess the computer is owned by you, and its simply that you have to install a mandatory webcam software to do the course.
If you then have to push a button "Start streaming", then its no danger at all. It does not matter if anything is transmitted unsecurely or unencrypted. It does not matter if the server lack any encryption - when talking about YOUR privacy.
The reason is, that if you itself trigger the webcam monitoring, then you ought to not start recording if you doing sensitive things (eg when you are not working on your academic Project), and only start it when you do nonsensitive things (eg just sitting in front of computer and Writing).
Then its also your responsibility to make sure theres no sensitive things in background.
I guess its simple as this: if there is a recording, then you pass the test, if theres no recording, you fail the test, even if you have done the test correctly.
And all the software does is to ensure you do not stream a prerecorded file or something like that. Thus you are allowed to turn on or turn off the webcam software, but not "tamper" with it.
There is a second possibility, and that is that the webcam software is started by the University, and the University simply start the webcam software when "exam time" starts. Then its a bit worser.
If the authentication protocol for the "Start" signal is bad, then a hacker could send a start signal, and force the software to record lets say embarassing things, that would get your teacher to put a failure on you or such things.
However, a authentication protocol simple as the webcam software polling a HTTP server for a start signal would be secure enough, since if a hacker is in a position to be able to modify YOUR network traffic, then you have worser problems (leaked passwords etc) than the hacker has the possibility to start your webcam.
Then we have a third problem, that applies to BOTH if the camera recording is triggered by you, or University. And this is not about privacy, this is more about DDoS/Sabotage. If the stream is not propely authenticated, it can be possible for a sabotager - lets say your classmate does not want you to succeed the test.
If he is able to spoof your identity, he could transmit a recording of his friend sitting in front of a webcam, under your identity, causing you to get accused for cheating even that you did not cheat.
But that does not have any privacy concerns.